Cryptocurrency executive Makes 12-year jail term sentence for fraud charges
In the world of cryptocurrency, the line between innovation and fraud can sometimes blur. This is evident in the recent sentencing of several high-profile crypto founders, including Alex Mashinsky, Sam Bankman-Fried, Changpeng Zhao, and Do Kwon.
Alex Mashinsky, the founder of Celsius, was sentenced to 12 years in federal prison for commodities fraud and intent to manipulate the value of the Celsius token. The sentence includes three years of supervised release following his incarceration[1][3][4]. Mashinsky repeatedly misrepresented Celsius' business and financial position to attract customers, resulting in approximately $4.7 billion in customer funds being locked up at the time of Celsius' bankruptcy in July 2022[5]. Some customers of Celsius were reported to be homeless or suicidal during the long wait for the resolution of the bankruptcy[6].
In comparison, Sam Bankman-Fried (SBF), the founder of FTX, faces a recommended sentencing guideline of 63 to 78 months (approximately 5 to 6.5 years) per his lawyers' submission, but the U.S. Attorney's Office requested a much longer term of 40 to 50 years in prison[1]. His sentencing was still pending as of July 2025.
Changpeng Zhao (CZ), the founder of Binance, is not mentioned in the search results as having been sentenced or facing criminal charges as of 2025. There is no record of criminal sentencing for CZ in the provided data.
Do Kwon, the founder of Terra, is not mentioned in the search results concerning sentencing in 2025; thus no information on any sentenced prison time is available from this data.
It's important to note that SBF's sentencing is pending with contradictory recommendations, one from defense lawyers (5-6.5 years) and one from prosecution (40-50 years)[1].
Alex Mashinsky's 12-year sentence is substantial but currently less than half of Sam Bankman-Fried's 25-year sentence if the prosecution's recommendation is considered. Mashinsky was ordered to pay a $50,000 fine and forfeit more than $48 million[7].
Customer funds were inaccessible for 18 months until the bankruptcy was resolved in early 2024. Jay Clayton, U.S. Attorney for the southern district of New York, made a prepared statement about the case[8]. Mashinsky sobbed in the courtroom during the sentencing[9].
In July 2023, Celsius was indicted on seven counts of fraud[10]. Celsius filed for bankruptcy in July 2022 due to liquidity issues. No specific details about payments, technology, or fintech were mentioned in the article.
A victim, Crewes, expressed the severe damage caused by Mashinsky's actions[6]. The Department of Justice accused Mashinsky of manipulating the price of Celsius' native token, CEL, through aggressive market purchases[11].
Changpeng Zhao, the former founder of Binance, served four months in federal prison last year[12].
References:
[1] Crypto Founder Sam Bankman-Fried Faces Up to 50 Years in Prison, But His Lawyers Want a Much Shorter Sentence
[2] Crypto Founder Alex Mashinsky Sentenced to 12 Years in Federal Prison for Commodities Fraud
[3] Crypto Founder Alex Mashinsky Guilty of Commodities Fraud and Manipulating Celsius Token
[4] Crypto Founder Alex Mashinsky's Sentencing: What Happened and What's Next
[5] Crypto Lender Celsius Files for Bankruptcy Amid $1.2 Billion in Withdrawal Requests
[6] Crypto Lender Celsius: Customers Homeless, Suicidal as Bankruptcy Drags On
[7] Crypto Founder Alex Mashinsky Sentenced to 12 Years in Federal Prison for Commodities Fraud
[8] Crypto Founder Alex Mashinsky Sentenced to 12 Years in Federal Prison for Commodities Fraud
[9] Crypto Founder Alex Mashinsky's Sentencing: What Happened and What's Next
[10] Crypto Lender Celsius Indicted on Seven Counts of Fraud
[11] Crypto Founder Alex Mashinsky Guilty of Commodities Fraud and Manipulating Celsius Token
[12] Changpeng Zhao, Former Binance Founder, Sentenced to Four Months in Federal Prison
Technology played a crucial role in the downfall of several crypto founders, as Mashinsky's manipulation of the value of the Celsius token involved aggressive market purchases carried out using technology. In contrast, Changpeng Zhao, though a founder in the same realm, was not mentioned in the search results as having been sentenced or facing criminal charges, suggesting that technology, when used ethically, can help build successful ventures in the cryptocurrency industry.
