US federal prosecutors have urged a court to reject Alex Mashinsky's motion to vacate his 12-year sentence for fraud tied to the collapse of Celsius. The former CEO, now representing himself, argued his original lawyers gave him ineffective assistance, but the Southern District of New York called several of his claims "without merit."
Federal prosecutors in the Southern District of New York (SDNY) have asked a court to deny former Celsius CEO Alex Mashinsky's bid to vacate his fraud conviction and sentence. SDNY Attorney James McDonald and Assistant US Attorney Allison Nichols made the filing on Friday, arguing that many of Mashinsky's legal arguments were without merit.
Mashinsky is serving a 12-year sentence for fraud and market manipulation connected to his time running Celsius, the now-defunct cryptocurrency lending platform. He informed the court in May that he would proceed pro se, representing himself, and filed a motion to vacate that raised claims involving cryptocurrency exchange FTX and his former colleague, ex-Celsius chief revenue officer Roni Cohen-Pavon.
Prosecutors pushed back on those claims. According to SDNY prosecutors: "Mashinsky has not even submitted a sworn declaration in support of these baseless allegations." They argued his petition should be denied without a hearing or further fact-finding, adding that he blames his lawyers for failing to press certain arguments on his behalf while stopping short of claiming he is factually innocent.
As of Tuesday, the judge overseeing the case had not responded to the prosecutors' filing. Mashinsky was sentenced in May 2025 to 144 months in prison after pleading guilty to commodities fraud and securities fraud tied to manipulative and deceptive devices at Celsius. Cohen-Pavon, who prosecutors said provided substantial assistance to the case against Mashinsky, was sentenced to time served in May.
Other penalties still unresolved
Celsius was one of several crypto companies that filed for bankruptcy in 2022 amid a market downturn that started with the collapse of Terraform Labs. Authorities indicted Mashinsky and Cohen-Pavon in 2023, and both later pleaded guilty. The former CEO was ordered to pay $48 million in forfeiture at sentencing and agreed to pay $10 million as part of a separate settlement with the US Federal Trade Commission.
The US Commodity Futures Trading Commission (CFTC) announced in June that Mashinsky was permanently banned from trading in markets within its purview, resolving one of the last outstanding cases against him and Celsius. However, the US Securities and Exchange Commission's civil action against Mashinsky, first filed in 2023, remains ongoing even though the court had already reached a judgment against the platform.
As of July 30, the SEC reported that its attorneys and Mashinsky were engaged in settlement discussions. The regulator asked the court for 60 days to file a status report, pushing any potential resolution to the end of September.
Source: Cointelegraph
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