Prosecutors Push Back on Mashinsky Bid to Vacate 12-Year…

Why Is Mashinsky Challenging His Conviction?

Federal prosecutors are opposing an attempt by former Celsius CEO Alex Mashinsky to overturn his fraud conviction and 12-year prison sentence, arguing that his claims lack merit and do not justify a new hearing. In a Friday filing, prosecutors in the Southern District of New York urged the court to reject Mashinsky’s petition to vacate his conviction and sentence. The former crypto executive is representing himself after informing the court in May that he would proceed pro se. Mashinsky’s motion includes claims involving collapsed cryptocurrency exchange FTX and former Celsius chief revenue officer Roni Cohen-Pavon. He has also argued that his previous lawyers provided ineffective assistance by failing to pursue certain arguments on his behalf. Prosecutors rejected that reasoning, saying Mashinsky had not submitted a sworn declaration supporting the allegations and was largely repeating arguments already considered during sentencing. “He presents a litany of complaints, blaming others for problems at Celsius and rehashing the evidence presented at his sentencing hearing,” prosecutors said. “Though Mashinsky stops short of claiming that he is factually innocent, he blames his lawyers for failing to press certain arguments on his behalf.” The judge overseeing the case had not ruled on the request following the prosecutors’ response.

What Would Mashinsky Need to Show?

Mashinsky’s challenge centers partly on ineffective assistance of counsel, a difficult route for defendants seeking to overturn convictions after sentencing. Prosecutors argue that disagreements over legal strategy do not establish that his previous lawyers performed inadequately or that different decisions would have changed the outcome. The government also challenged the factual basis for Mashinsky’s allegations, arguing that further hearings or fact-finding are unnecessary. If the court agrees, the petition could be denied without an evidentiary hearing. Mashinsky pleaded guilty to commodities fraud and securities fraud tied to manipulative and deceptive conduct at Celsius. In May 2025, he was sentenced to 144 months in prison and ordered to forfeit $48 million. Cohen-Pavon, who prosecutors said provided substantial assistance in the case against Mashinsky, received a sentence of time served in May. Mashinsky’s attempt to revisit Cohen-Pavon’s role is therefore part of a wider argument that responsibility for Celsius’s conduct and the government’s case against him were handled improperly.

Investor Takeaway

Mashinsky’s filing is unlikely to change the financial outcome for former Celsius customers on its own. The more immediate issue is whether the court finds enough substance in his claims to reopen any part of a criminal case that ended with a guilty plea and a 12-year sentence.

How Much Legal Exposure Does Mashinsky Still Face?

The criminal sentence is only one part of the legal fallout from Celsius’s collapse. Mashinsky also agreed to pay $10 million through a separate settlement with the U.S. Federal Trade Commission, alongside a much larger suspended judgment connected with the agency’s case. The Commodity Futures Trading Commission added another restriction in June, permanently banning Mashinsky from trading in markets overseen by the commodities regulator. That resolved one of the remaining regulatory cases stemming from Celsius, but the Securities and Exchange Commission’s civil action against Mashinsky has continued. As of July 30, the SEC and Mashinsky were engaged in settlement discussions, with the regulator requesting another 60 days before providing the court with a status update. A settlement in the SEC case could close another major part of the enforcement campaign tied to Celsius, although it would not affect Mashinsky’s criminal sentence unless separate court action succeeds.

What Does The Case Mean For The Celsius Collapse?

Celsius filed for bankruptcy in 2022 during a broader crypto credit crisis that followed the collapse of Terraform Labs and exposed weaknesses across highly leveraged digital asset lenders. Authorities charged Mashinsky and Cohen-Pavon in 2023, placing the lender’s business practices and treatment of customer funds at the center of one of the largest criminal cases arising from that period. Mashinsky’s effort to vacate his sentence now shifts attention from the original fraud allegations to whether his prosecution and legal representation met the standards required for the conviction to stand. The government’s response shows that prosecutors intend to defend the existing judgment rather than reopen questions already addressed during sentencing. Unless Mashinsky can convince the court that his former lawyers’ actions caused a legally meaningful failure in his defense, the 12-year sentence is likely to remain the central outcome of the Celsius criminal case.