Prosecutors Reject Mashinsky’s Bid to Overturn Celsius Fraud Conviction

Prosecutors Challenge Motion to Overturn Conviction

Federal prosecutors are actively opposing efforts by Alex Mashinsky, the former CEO of the now-defunct cryptocurrency lending platform Celsius, to vacate his 12-year prison sentence. The U.S. Attorney’s Office for the Southern District of New York submitted a filing Friday indicating that Mashinsky’s motion to vacate his conviction lacks legal merit. According to prosecutors James McDonald and Allison Nichols, Mashinsky has failed to present substantive evidence supporting his legal arguments. Mashinsky, who has been representing himself in court proceedings since May, included allegations regarding cryptocurrency exchange FTX and his former colleague Roni Cohen-Pavon, Celsius’s chief revenue officer, in his petition. Prosecutors dismissed these claims as baseless, noting that Mashinsky has not submitted sworn declarations to support his allegations. They recommended that the court reject the motion outright without scheduling additional hearings or factual proceedings.

Original Charges and Sentencing Details

Mashinsky received a sentence of 144 months in federal prison in May 2025 after entering guilty pleas to commodities fraud and securities fraud charges. Federal authorities determined that Mashinsky had engaged in manipulative and deceptive practices while leading Celsius. Beyond his incarceration, the court ordered Mashinsky to forfeit $48 million, and he separately agreed to pay $10 million to settle charges with the Federal Trade Commission. His former colleague Roni Cohen-Pavon, who served as Celsius’s chief revenue officer, received a reduced sentence of time served. Prosecutors credited Cohen-Pavon with providing substantial assistance in their case against Mashinsky, a factor that influenced his sentencing.

Both Mashinsky and Cohen-Pavon faced indictment in 2023, following Celsius’s bankruptcy filing in 2022. The lending platform’s collapse occurred during a significant cryptocurrency market downturn precipitated by the failure of Terraform Labs and subsequent bankruptcies of other major crypto companies.

Continuing Regulatory Enforcement Actions

Multiple regulatory agencies have pursued enforcement actions against Mashinsky extending well beyond his criminal conviction. In June, the U.S. Commodity Futures Trading Commission announced a permanent ban on Mashinsky from engaging in commodity trading under the regulator’s jurisdiction. Separately, the Securities and Exchange Commission’s civil action against Mashinsky, originally filed in 2023, continues to move forward. As of late July, the SEC reported that settlement discussions between its attorneys and Mashinsky’s legal representatives were underway. The regulator requested an additional 60 days to file a status report on the progress of settlement negotiations, a timeline that could extend any potential resolution into late September.

Mashinsky’s ongoing legal battles demonstrate the intensive regulatory focus on prosecuting cryptocurrency executives involved in fraud and market manipulation. His case exemplifies the broader enforcement environment facing the digital asset industry, where authorities have prioritized holding company leaders accountable for misconduct and investor harm.

The case reinforces regulatory enforcement commitments within crypto, protecting investor confidence across the industry.

Source: SDNY, via Cointelegraph. Not financial advice.