Alex Mashinsky, the founder and former CEO of the bankrupt crypto lending platform Celsius Network, was sentenced to 12 years in prison on Thursday, after pleading guilty in December to charges of securities fraud and commodities fraud, a Reuters report said.
U.S. federal prosecutors said Mashinsky, 59, misled Celsius customers, claiming the platform was safe, while secretly inflating the price of its own token, called CEL.
Prosecutors had asked for at least 20 years, calling it fair punishment after thousands of people lost billions of dollars, while Mashinsky personally gained over $48 million.
The case began when crypto lenders like Celsius offered users high interest rates and easy loans, while lending the same crypto to big investors to make a profit. Mashinsky promised investors interest rates as high as 17%, but when Celsius filed for bankruptcy, it had a $1.19 billion shortfall in its accounts.