Prominent gold advocate and financial commentator Peter Schiff has compared convicted Celsius Network founder Alex Mashinsky to notorious Ponzi schemer Bernie Madoff. Mashinsky was recently sentenced to 12 years in prison for defrauding investors through the troubled crypto lending platform.
Bitcoin critic Schiff took to social media platform X to share his thoughts on Mashinsky’s sentencing, stating that he had suspicions about Mashinsky’s fraudulent activities from the beginning. Schiff claimed that he “knew Mashinsky was a fraud the moment he met him during a Kitco debate.”
“His fraud was so obvious that I compared him to Bernie Madoff. The government didn’t act until after his Ponzi scheme collapsed,” Schiff asserted, sharing a resurfaced video from a 2021 debate where he challenged Mashinsky’s claims about Bitcoin yields.
Peter Schiff: Bitcoin has no yield
In the video shared by Schiff, a debate between the two men hosted by Kitco News becomes heated as Mashinsky claims that Bitcoin offers dividends through Celsius Network with a 6.2% yield. Schiff questioned Mashinsky on how such returns were achievable without risks.
Celsius Founder Alex Mashinsky was just sentenced to 12 years in prison. I knew this guy was a fraud the moment I met him during a Kitco debate. His fraud was so obvious that I compared him to Bernie Madoff. The government didn’t act until after his Ponzi scheme collapsed. pic.twitter.com/FQLBxwXMDE
— Peter Schiff (@PeterSchiff) May 8, 2025
“How do you earn yield on Bitcoin?” Schiff pressed. “You’ve got to be taking a tremendous amount of risk. The Bitcoin itself doesn’t generate any yield.”
Mashinsky explained that Celsius allowed customers to “unbank themselves,” and that the yield came from lending out Bitcoin. “It’s an amazing opportunity for people to unbank themselves, right? Take advantage of this market,” he argued.
Schiff remained skeptical, cautioning viewers, “You know who also had an amazing opportunity? Bernie Madoff had an amazing opportunity too.”
Schiff draws parallels between Mashinsky and Bernie Madoff
In official records from the US Department of Justice, it is noted that Bernie Madoff, who passed away in prison in 2021, orchestrated the largest Ponzi scheme in US history. A former NASDAQ chairman, Madoff defrauded thousands of investors of around $65 billion.
Madoff’s scheme was uncovered in 2008 during the global recession when he failed to cover $7 billion in withdrawals. He eventually pleaded guilty to 11 federal felonies and received a 150-year prison sentence. He passed away in 2021 at the age of 82.
The US DOJ confirmed in late December 2024 that the Madoff Victim Fund completed its final round of payments, totaling over $131 million. In total, nearly $4.3 billion was distributed to about 41,000 victims in 127 countries, compensating nearly 94% of their verified losses.
“This final round of payouts marked the end of a decade-long effort to identify thousands of victims worldwide and unravel intricate financial transactions,” the Department announced.
The majority of Madoff’s victims were ordinary individuals, with average losses per account averaging around $250,000, according to the Madoff Victim Fund (MVF).
Alex Mashinsky receives a 12-year sentence
As reported on May 8 by Cryptopolitan, US District Judge John Koeltl sentenced Mashinsky to 12 years in prison. The 59-year-old was convicted of securities fraud and commodities fraud for misleading investors about the safety and stability of Celsius.
The judge also found that Mashinsky inflated the value of Celsius’ CEL token while allegedly pocketing over $48 million in personal profits.
Federal prosecutors had sought a minimum of a 20-year sentence, stating that Mashinsky’s deception resulted in billions of dollars in losses for thousands of investors.
Mashinsky had requested a sentence of slightly over a year, citing remorse and a commitment to rectifying his actions with his family and former clients.