Ex-Celsius CEO seeks to vacate 12‑year prison sentence in New York

Former Celsius Network founder Alex Mashinsky has asked a federal court in New York to vacate his 12‑year prison term, arguing that his conviction rests on “tainted” evidence and that his original counsel was ineffective [2]. The motion, filed in the Southern District of New York, targets the sentencing process rather than the underlying fraud convictions [1].

Key takeaways

• Mashinsky seeks to overturn his 144‑month sentence, claiming ineffective assistance of counsel and tainted evidence [2].
• The motion challenges loss calculations and sentencing enhancements that the defense says overstated his role in Celsius’s collapse [1].
• He alleges that former FTX CEO Sam Bankman‑Fried deliberately targeted Celsius and that CEL‑token manipulation on FTX contributed to the crisis [2].
• Co‑executive Roni Cohen‑Pavon received time served after pleading guilty and cooperating with prosecutors [2].
• The case involves a $48 million forfeiture and a $10 million FTC settlement tied to a multibillion‑dollar judgment [2].

Motion details and legal arguments

Mashinsky’s filing, submitted pro se after his former lawyers ceased communication, contends that the court relied on “fruit of the poisonous tree” evidence when determining key sentencing factors [2]. He argues that the loss figures used to calculate sentencing enhancements were inflated, blending market‑driven declines with actions directly attributable to his leadership [1]. The defense also disputes the application of enhancements for leadership role and alleged market manipulation of the CEL token, asserting that the evidence supporting those findings was insufficient [1].

The motion does not seek to overturn the guilty pleas for commodities and securities fraud, but it asks the court to reconsider the sentence on procedural and constitutional grounds [1]. Specifically, Mashinsky claims that due‑process protections were compromised and that mitigating factors—such as the liquidity crisis facing Celsius during a broader market downturn—were not fully considered [1].

Context of the Celsius collapse

Celsius filed for bankruptcy in 2022 after a wave of crypto‑sector failures, and U.S. authorities charged Mashinsky and former chief revenue officer Roni Cohen‑Pavon with fraud and market‑manipulation in July 2023 [2]. Both executives pleaded guilty; Cohen‑Pavon received a sentence of time served, citing her substantial assistance to prosecutors [2]. Mashinsky’s original sentencing in May 2025 imposed a 144‑month term based on billions of dollars in investor losses attributed to his conduct [1]. He also faces a $48 million forfeiture and a separate $10 million FTC settlement [2].

Why it matters

The motion highlights ongoing disputes over how loss calculations and sentencing enhancements are applied in high‑profile crypto fraud cases. If the court grants any relief, it could set a precedent for revisiting sentences where evidence is deemed tainted or counsel ineffective. Conversely, a denial would leave the 12‑year term intact, reinforcing the judiciary’s stance on accountability for crypto‑lending failures. The outcome will also influence how prosecutors and defense teams approach evidence and procedural safeguards in future digital‑asset litigation.