Mashinsky Seeks to Vacate 12-Year Sentence, Cites SBF Link

Alex Mashinsky, the founder and former CEO of Celsius Network, filed a handwritten motion in the U.S. District Court for the Southern District of New York asking the court to vacate his 12‑year prison sentence. The motion seeks habeas corpus relief and alleges ineffective assistance of counsel and a conflict of interest arising from his lawyers’ ties to Sam Bankman‑Fried.

The filing identifies Mukasey & Young LLP and claims the firm faced financial distress that produced an “unavoidable and absolute conflict of interest with client.” Mashinsky attached supplementary materials and argues that the alleged conflict affected “every strategic decision made by counsel since the outset of the petitioner’s representation,” according to the motion.

The motion also links the law firm’s engagement with Sam Bankman‑Fried, the former FTX CEO, to market conduct Mashinsky alleges harmed Celsius. The filing states Bankman‑Fried manipulated the market for Celsius’s CEL token and the staked ether product stETH, actions Mashinsky says contributed to Celsius pausing customer withdrawals and later filing for bankruptcy.

The filing invokes the doctrine commonly called “fruit of the poisonous tree,” arguing that evidence or decisions that flowed from conflicted representation should be excluded and could justify vacating the sentence.

Mashinsky pleaded guilty to commodities and securities fraud and was sentenced to 12 years in prison. Regulators including the SEC, CFTC and FTC alleged at the time that Mashinsky defrauded customers of roughly $42 million. At his plea hearing he stated, “I know what I did was wrong, and I want to try to do whatever I can to make it right.”

Last month the Federal Trade Commission secured a $10 million settlement with Mashinsky that includes a permanent ban on working in the cryptocurrency industry. The FTC previously obtained a $4.7 billion judgment tied to losses from Celsius’s collapse; most of that judgment has been suspended, leaving the $10 million payment and the industry ban in effect.

The current filing asks the Southern District of New York to set aside Mashinsky’s sentence on the grounds that counsel’s alleged financial instability and outside ties deprived him of effective assistance. The court will decide whether to grant further filings, hold hearings, or rule on the assertions about counsel and the claimed connections to Bankman‑Fried’s conduct.