Alex Mashinsky, the former chief executive of collapsed crypto lender Celsius, has filed a motion in a New York federal court to vacate his 144-month prison sentence for fraud and market manipulation. The 12-year term was imposed in May 2025 after Mashinsky pleaded guilty to commodities fraud and securities fraud related to deceptive practices and manipulation of the company’s CEL token.
In his pro se filing in the U.S. District Court for the Southern District of New York, Mashinsky argues that his conviction and sentence should be revisited due to ineffective assistance of counsel and “fruit of the poisonous tree” — a legal doctrine applied when evidence is allegedly tainted by government misconduct. He claims his former legal team stopped communication, forcing him to file directly with the court. The motion does not withdraw his guilty plea but challenges the integrity of the sentencing process.
Mashinsky’s submission attempts to shift blame for Celsius’ collapse and CEL token manipulation. He alleges that former FTX chief Sam Bankman-Fried intended to “destroy Celsius” and was responsible for much of the alleged market manipulation on the exchange. He also points to former Celsius chief revenue officer Roni Cohen-Pavon, claiming Cohen-Pavon attempted a “hostile takeover” of the firm. Cohen-Pavon pleaded guilty earlier, cooperated with prosecutors, and was sentenced to time served, avoiding a lengthy prison term.
The motion disputes the calculation of investor losses and the application of sentencing enhancements. Federal guidelines tie penalties to financial harm, and prosecutors attributed billions in losses to Mashinsky’s conduct. The defense contends those figures overstate his direct impact, failing to separate market-driven losses from company-specific actions. Mashinsky’s team also argues that leadership role adjustments, market manipulation findings, and aggregated harm assessments lacked sufficient evidence.
Constitutional claims are raised around procedural fairness, suggesting the court did not fully account for mitigating factors such as Celsius’ internal complexity and the liquidity crisis during the broader crypto downturn. The judge must now decide whether the claims meet the high threshold required to overturn or modify a sentence after judgment. A denial would keep Mashinsky’s 144-month term intact, while any partial grant could lead to a revised sentence or new loss calculation hearing.
The case stems from Celsius’ 2022 bankruptcy, which froze withdrawals for hundreds of thousands of users and resulted in billions in losses. Mashinsky has already been ordered to forfeit $48 million and agreed to pay $10 million under an FTC settlement, while Cohen-Pavon paid over $1 million and a fine. The motion extends the legal fallout but does not change the broader lessons about crypto lending platforms mixing yield products, native tokens, and weak disclosures.
