By LARRY NEUMEISTER

NEW YORK (AP) — The founder and former CEO of the cryptocurrency lending platform Celsius Community was sentenced Thursday to 12 years in jail after a prosecutor labeled him a predator who “preyed on hope” by attractive weak clients to danger their life financial savings for a supposedly secure funding.

Alexander Mashinsky, 59, was sentenced by U.S. District Decide John G. Koeltl, who stated a considerable time period in jail was obligatory for somebody who engaged in “extremely serious” crimes that enabled him to pocket over $45 million whereas a few of his clients misplaced all the things and suffered extreme psychological hurt.

Celsius declared chapter in 2022, exposing dangerous monetary bets Mashinsky had made with a number of the $20 billion that 1000’s of shoppers poured into the corporate. He had promised that their cash can be secure and safe at Celsius, which pitched itself as a modern-day financial institution the place crypto belongings may earn curiosity.

The protection blamed the collapse of Celsius on a “cataclysmic downturn” of cryptocurrency markets in Could and June of 2022 and stated in courtroom papers that Mashinsky’s “actions were never predatory, exploitative or venal. He never acted with the intent to hurt anyone.”

However Assistant U.S. Lawyer Allison Nichols forged him as a monetary predator, telling the choose Thursday that Mashinsky had deceived clients from the beginning by exaggerating Celsius’ means to construct momentum.

“He preyed on hope,” she stated. “Mashinsky knew exactly what he was doing — selling these people hope.”

She stated the shoppers weren’t going to be made financially entire no matter cash that may be recovered by chapter proceedings.

Earlier than he was sentenced, Mashinsky sobbed a number of instances as he apologized to clients and referenced his tough previous as his household was capable of go away a small Ukrainian city within the former Soviet Union with assist from the US when he was 7.

The household moved to Israel, the place Mashinsky served three years within the Israeli Protection Forces as a fighter pilot earlier than coming to America.

Mashinsky stated he “never meant to hurt anybody here after all this country has done for me.”

“I’m truly sorry,” he stated, describing himself as somebody “who came from nothing.”

When he pleaded responsible in December, Mashinsky admitted to deceptive clients between 2018 and 2022 by promising their investments have been secure at the same time as he fabricated Celsius’ profitability and put clients’ funds on the mercy of uncollateralized loans and undisclosed dangerous market bets.

His legal professional, Marc Mukasey, stated sufferer affect statements submitted to the courtroom have been “rather brutal” towards his shopper.

“We hear the intensity of their pain,” he stated. “Our sympathies are with everyone.”

A number of victims spoke on the sentencing listening to.

Cameron Crewes, who serves on a victims’ committee, known as for a “harsh sentence,” saying almost 250 victims died earlier than they may see justice served or get adequately compensated for losses.

“Many people have been wiped out,” he stated.

In an announcement, U.S. Lawyer Jay Clayton stated Mashinsky “made tens of millions of dollars while his customers lost billions.”

He added: “America’s investors deserve better. The case for tokenization and the use of digital assets is strong, but it is not a license to deceive. The rules against fraud still apply.”

Initially Revealed: Could 8, 2025 at 5:53 PM EDT