NEW YORK (Reuters) – Alex Mashinsky, the founder and former chief executive of bankruptcy cryptocurrency lender Celsius Network, was sentenced on Thursday to 12 years in prison after pleading guilty in December to securities fraud and commodities fraud.

Mashinsky’s sentence was imposed by U.S. District Judge John Koeltl in Manhattan, and is among the longest in a criminal case arising from the 2022 meltdown in cryptocurrency markets.

Sam Bankman-Fried, who led the FTX exchange, is serving a 25-year prison sentence after being convicted of fraud. He is appealing.

Federal prosecutors said Mashinsky, 59, misled customers about Celsius’ safety, and artificially inflated the value of Celsius’ proprietary token Cel.

They sought a prison term of at least 20 years, calling it “just punishment” for Mashinsky’s having victimized thousands of people and caused billions of dollars in losses, while drawing more than $48 million of personal benefits.

“The case for tokenization and the use of digital assets is strong but it is not a license to deceive,” U.S. Attorney Jay Clayton in Manhattan said in a statement.

Mashinsky Must Forfeit $48.4 Million

Mashinsky sought one year and one day in prison, saying he felt remorse and wanted to do right by his family and former Celsius customers. His sentence includes three years of supervised release and a $48.4 million forfeiture.

Lawyers for Mashinsky were not immediately available to comment.

Founded in 2017, Hoboken, New Jersey-based Celsius filed for Chapter 11 bankruptcy in July 2022 after customers rushed to withdraw deposits as cryptocurrency prices fell.

Born in Ukraine, Mashinsky emigrated with his family to Israel, and moved to New York after visiting the city in 1988.

Cryptocurrency lenders have promised easy loan access and high interest rates to depositors while lending tokens to institutional investors, hoping to profit from the difference.

Celsius offered 17% interest on some deposits, but had a $1.19 billion balance sheet deficit when it sought bankruptcy protection.

Mashinsky has also faced civil lawsuits by the U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission, U.S. Federal Trade Commission and New York Attorney General Letitia James.

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(Reporting by Jonathan Stempel in New York; Editing by Daniel Wallis)