US prosecutors have submitted more than 200 victim impact statements in the case against Alex Mashinsky, the former CEO and founder of Celsius Network.
The documents, totaling over 400 pages, describe the emotional and financial damage customers suffered after the crypto lending platform collapsed.
Sentencing set for May as DOJ presents victim evidence
Alex Mashinsky is scheduled to be sentenced on May 8 in Manhattan federal court. In a letter dated April 23, interim US Attorney Jay Clayton informed the court that the Department of Justice had gathered the statements to highlight the scale of the harm caused by Celsius’s downfall. Mashinsky faces allegations of misleading customers and misrepresenting the company’s financial condition in the lead-up to its bankruptcy.
The victim statements were submitted to Wendy Olsen, the court’s Victim/Witness Coordinator. Many of them describe severe losses and their long-term impact on families and personal finances. Several victims accuse Mashinsky of promoting false narratives about Celsius’s health even as the company neared collapse.
Customers describe devastating losses and mistrust
Celsius operated as a platform where users could earn high yields by depositing cryptocurrencies and borrow against crypto collateral. It attracted hundreds of thousands of users, many of whom believed in the company’s promises of decentralization and financial freedom. However, in June 2022, the company froze withdrawals, blaming extreme market conditions. A month later, it filed for bankruptcy, trapping billions in user assets.
One user named Brian claimed he lost over $7 million across three Celsius accounts. He also revealed that he is now facing legal action from Celsius because he withdrew funds shortly before the platform went under. Others expressed frustration that insiders were able to pull out funds while customers were reassured that assets were safe.
Public outcry calls for maximum sentence
Many statements reflect anger and a sense of betrayal. One victim wrote that even on the day operations were halted, Celsius staff told them funds were secure. Some accused Mashinsky of creating a culture based on dishonesty and protecting insiders at the expense of retail users.
A number of letters pleaded with the court to apply the entire 30-year prison term. The victims detailed the enduring psychological and monetary distress and mentioned some victims who died by suicide because of their losses. Victims stated to the court that their struggles from Celsius’ damage will persist for numerous years among their families and themselves.