Alexander Mashinsky, the founder and former CEO of the cryptocurrency trading platform Celsius, has been sentenced to 12 years in prison following fraud charges. The sentencing follows the collapse of Celsius, a platform that allowed customers to invest in digital currencies, including its own coin, CEL.

Mashinsky, aged 50, pleaded guilty to securities fraud in December, which reduced the severity of the charges against him. The indictment stated that Celsius executives misappropriated over $4 billion in customer assets to fund operations, issue unsecured loans, and invest in high-risk ventures. Mashinsky was also accused of manipulating the price of CEL by using customer funds to purchase the currency, thus artificially inflating its value.

At its height in late 2021, Celsius boasted over one million clients and held assets exceeding $25 billion. However, the company faced significant challenges in the spring of 2022 as cryptocurrency values plummeted. In response to substantial customer withdrawals, Celsius froze over $4.7 billion in customer accounts on June 12, 2022, before declaring bankruptcy a month later.

A report in March indicated that 93% of the frozen assets had been recovered and returned to former Celsius customers. The cryptocurrency collapse in 2022 impacted several other startups in the industry, including FTX, the second-largest crypto exchange, which filed for bankruptcy in November 2022.