- Alex Mashinsky filed a motion to vacate his 12-year prison sentence for fraud.
- His motion argues for ineffective counsel and a “fruit of a poisonous tree” issue.
- Mashinsky claims his legal team had a conflict due to financial distress and work for FTX‘s Sam Bankman-Fried.
- He previously pleaded guilty to defrauding Celsius customers of $42 million.
Alex Mashinsky, the founder of the bankrupt crypto lender Celsius, has filed a handwritten motion to vacate his 12-year prison sentence in the District Court for the Southern District of New York. His filing cites ineffective legal counsel and evidentiary issues as core grounds for this dramatic legal challenge.
Mashinsky specifically claimed his defense was compromised by his law firm’s “undisclosed financial distress.” Consequently, he argued this created an unavoidable conflict of interest that affected every strategic decision. The motion further alleges this conflict was linked to the firm’s engagement with FTX founder Sam Bankman-Fried, whose alleged market manipulation harmed Celsius.
Mashinsky was arrested after Celsius paused withdrawals and later filed for bankruptcy, leaving customers locked out of billions. He eventually pleaded guilty to charges of defrauding customers for $42 million. In court, he stated, “I know what I did was wrong, and I want to try to do whatever I can to make it right.”
However, he now seeks to overturn the resulting 12-year sentence handed down last year. Meanwhile, Mashinsky was recently banned from the crypto industry as part of a $10 million settlement with the FTC, which suspended the bulk of a larger $4.7 billion judgment.
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