Alexander Mashinsky, the founder and former CEO of Celsius Network, is facing a potential 20-year prison sentence for fraud that resulted in billions of dollars in losses for customers.

Prosecutors argue that Mashinsky's actions were deliberate and calculated, aimed at deceiving customers for personal gain, rather than stemming from negligence or bad luck.

In December, Mashinsky pleaded guilty to federal fraud charges, admitting to misleading customers from 2018 to 2022 and profiting approximately $48 million through manipulative practices.

Prosecutors contend that a lenient sentence for Mashinsky would undermine the law's authority and set a dangerous precedent for cryptocurrency executives prioritizing personal enrichment over customer welfare.

Despite pleading guilty, Mashinsky has not fully accepted responsibility, instead blaming external factors for the company's collapse.

Mashinsky's sentencing is scheduled for May 8, 2025, and if the court agrees to the Department of Justice's request, he may receive a shorter sentence than FTX's Sam Bankman-Fried, who was sentenced to 25 years.

In addition to the SEC, other regulatory bodies such as the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) have also brought charges against Mashinsky and Celsius.

His fraudulent activities included assuring customers their investments were safe while engaging in self-dealing and misusing funds, which led to over $20 billion being invested in Celsius before its bankruptcy.

Celsius filed for Chapter 11 bankruptcy in July 2022, leaving around $4.7 billion in customer funds inaccessible and a post-bankruptcy shortfall exceeding $1 billion.

Efforts to compensate Celsius victims have included unstaking Ethereum holdings, with the company recently announcing a second payout to creditors totaling $127 million in Bitcoin and US dollars.

In his defense, Mashinsky's attorneys argue for a maximum sentence of just one year and one day, claiming that the company's collapse was primarily due to a significant downturn in the cryptocurrency market.

Interestingly, despite Mashinsky's legal troubles, the CEL token saw a significant increase of over 70% in value, trading at $0.1507 following the Department of Justice's sentencing request.