Jonathan Stempel
NEW YORK (Reuters) – Alex Masski, founder and former CEO of the bankrupt cryptocurrency lender Celsius Network, was sentenced to 12 years in prison on Thursday after pleading guilty to securities and product fraud in December.
Maski’s ruling was imposed by Manhattan US District Judge John Cortre and is one of the longest criminal cases arising from the 2022 meltdown in the cryptocurrency market.
Sam Bankman-Fried, who led the FTX Exchange, has been sentenced to 25 years in prison after being convicted of fraud. He is attractive.
Federal prosecutors said the 59-year-old Machineski misunderstood customers about the safety of Celsius and artificially inflated the value of Celsius’s own token cell.
They sought at least 20 years in prison term and escorted more than $48 million in personal benefits, calling Machineski a “just a punishment” for causing billions of dollars at the expense of thousands of people.
“The cases of tokenization and digital assets are strong, but they are not licenses to deceive,” Manhattan lawyer Jay Clayton said in a statement.
Maski said he wanted a year and a year in prison, and felt regret, and wanted to do it right by his family and former Celsius clients. His ruling includes three years of supervised release and $48.4 million forfeiture.
Machineski’s lawyer could not immediately comment.
Founded in 2017, Hoboken, New Jersey-based celsius filed for Chapter 11 bankruptcy in July 2022 after customers quickly withdrawing their deposits as cryptocurrency prices fell.
Born in Ukraine, Maskie moved to Israel with his family and visited the city in 1988 before moving to New York.
Cryptocurrency lenders lend to institutional investors, hoping to make easy loan access and high interest rates to depositors and profit from the differences.
Celsius provided 17% interest on some deposits, but had a balance sheet deficit of $1.19 billion when he sought bankruptcy protection.
Masski is also facing civil lawsuits by the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Trade Commission and New York Attorney General Letitia James.
(Reporting by Jonathan Stempel of New York, edited by Daniel Wallis)