In a major development in the world of cryptocurrency fraud, Alex Mashinsky, the founder of bankrupt crypto lender Celsius, has been sentenced to 12 years in prison for defrauding customers and contributing to the company’s collapse. The sentence, handed down on Thursday, May 8, concludes a case that exposed one of the most dramatic failures in the crypto sector.

Mashinsky, once a prominent figure in the digital asset space, was found guilty of securities and commodities fraud after prosecutors revealed he had stolen over $48 million from Celsius customers. Authorities described the case as a massive betrayal that saw thousands of users—many of whom invested their life savings—left with nothing when the company went under in 2022.

Celsius had marketed itself as a safe and high-yield crypto lending platform, promising interest rates as high as 17% and claiming to responsibly manage billions in customer assets. At its peak, it boasted 1.7 million users and more than $11 billion in managed assets. But beneath that façade, the company was engaging in risky, highly leveraged trading strategies. When the broader crypto market crashed, those trades unraveled, triggering the firm’s insolvency and widespread losses.

While the Department of Justice pushed for a 20-year sentence, calling it a fair consequence for the gravity of Mashinsky’s actions, the final decision fell short of that mark. Mashinsky’s legal team argued that he never intended to harm investors, portraying him as a man shaped by past hardship, including his Jewish family’s persecution in Soviet Russia and his service in the Israeli military. The judge, however, declined to factor those arguments into the sentencing decision.

The case has become emblematic of the unchecked risks and opaque practices that plagued the crypto boom, with Mashinsky’s downfall serving as a cautionary tale for both investors and regulators.