Celsius CEO Alex Massky received a 12-year ruling in a crypto fraud case

Alexander Masski, former CEO of Celsius Network, was sentenced to 12 years in prison after pleading guilty to two years of fraud on Thursday.

Standing before District Judge John G. Coertre in the southern district of Manhattan, Maskie faced the consequences of what prosecutors described as a drastic scheme to fraudulent investors.

In December he pleaded guilty to merchandise fraud and schemes that manipulate Celsius tokens.

His sentence was made in Court 14A, 500 Pearl Street.

The legal issues with Machineski began in 2023 when Celsius was arrested on charges of securities, goods and wire fraud, as it reached a $4.7 billion settlement with the Federal Trade Commission, one of the biggest in the history of the FTC.

The settlement, conditional on Celsius, returning the remaining customer assets in the bankruptcy proceedings, highlighted the magnitude of the fraud.

Prosecutors accused Machineski of being a misleading investor about the safety and profitability of Celsius yield platforms, but secretly sold tens of millions of dollars of personal holdings.

He initially denied fraud, but his guilty plea and Thursday’s ruling marked the final chapter of a longtime case accused by the Securities and Exchange Commission and the Commodity Futures Trade Commission, which accused Celsius and Mashinsky, who coordinated the multi-billion-dollar dollar fraud scheme.

Mashinsky’s downfall reflects the fate of once dominant crypto executives, including FTX founder Sam Bankman-Fried, Binance’s Changpeng Zhao and Do Kwon of Terraform Labs.

Bankmanfried was sentenced to 25 years in March 2024 for the massive fraud and conspiracy that fate his cryptocurrency exchange and related hedge funds.

Once celebrated as a code wonder, Bankmanfried was exposed by misusing billions of dollars with client funds to support his own trading company, Alameda, living a luxurious lifestyle in Hong Kong and later in the Bahamas.

Caroline Ellison, who led Alameda’s research and romantically involved with Bankmanfried, was sentenced to a much lighter sentence of two years. Her collaboration with prosecutors proved important in unraveling the complex web of fraudulent activities at FTX, allowing authorities to build strong cases against bank Fried and other executives.

Bankmanfried is in the process of sueing his beliefs and sentences.

Ryan Salame, former head of FTX founder Sam Bankman-Fried, was sentenced for 90 months and was released from surveillance for three years.

FTX Engineering Chief Nishad Singh did not receive prison time and three years of supervised releases due to his role in crypto fraud. Gary Wang, co-founder and chief technology officer of FTX, also avoided prison time.

In May 2024, FTX’s bankrupt real estate announced that almost every client would get their money back.

The judge on Wednesday dismissed most of the claims against celebrities and athletes involved in promoting FTX on commercials and other platforms.

Stars like Tom Brady, Gisele Bündchen, Kevin O’Leary and Stephen Curry were among those facing the lawsuit brought on by a group of FTX investors.

In November 2023, Zhao, commonly known as the “CZ,” signed a contract with the US government to resolve a multi-year investigation into Binance, the world’s largest cryptocurrency exchange.

Zhao resigned as CEO in 2023 but held a large stake in Binance.

In April 2024, the founder of Binance’s billionaire was sentenced to four months in prison after pleading guilty to allowing money laundering in a crypto exchange. He was sentenced to prison at a low-security federal prison in Lompoc, California.

Under the new leadership, Binance has received a strategic pivot and is working closely with the pro-crypto stance of the Trump administration. CEO Richard Teng described President Donald Trump’s second term as a “great reset” for the cryptocurrency industry, noting that the regulatory environment for Binance has dramatically improved in the US

A few years before Bankman-Fried’s FTX scam was exposed, and Binance and its founder admitted to the billions of dollars and settled in the US several years before settling in the US, Kwon was widely regarded as the top villain of Crypto for nearly dismantling the entire sector with his failed US dollar-raised Stablecoin.

It was May 2022, and Kwon was riding high. His company, Terraform Labs, was behind one of the most popular US stubcoins on the planet. The venture funds were included.

And it all came crashing.

Most stubcoins are backed up by a combination of cash and other assets that match the value of tokens in circulation, but Kwon’s invention was instead supported by a complex code set. When the algorithm fails in May 2022, investors cost $40 billion on market value overnight, causing catastrophic losses to multiple investors, contributing to the collapse of the hedge fund’s three-arrow capital in June 2022, followed by Voyager Digital, then blocked, and then Generalis.

The Stablecoin explosion also rocked confidence in the sector, accelerating the already ongoing cryptocurrency slide as part of a broader pullback from risk.

Last June, a judge approved Do Kwon and his bankrupt Terraform Labs settled with the U.S. Securities and Exchange Commission for $4.5 billion.

Kwon was extradited from Montenegro to the US in January 2025 to face fraud charges.

Crypto Hedge Fund Three Arrows Capital’s Fall of Fall of Lenders Voyager Digital and Celsius can all stem from the collapse of Kwon’s Stablecoin project.

When the 3AC lender asked for a portion of the cash in the margin call flood, the money was not there. Many of the company’s counterparties were unable to meet the demands from investors, including retail owners, who were promised annual revenue of 20%.

All three have gone bankrupt and are currently in various stages of resolving their debts, with Celsius just born from bankruptcy in January.

3AC co-founder Kyle Davis said he didn’t feel sorry for his fund’s collapse and unlike his co-founder Su Zu, who served time in a prison in Singapore, he was able to avoid prison time by bouncing around the world.