Celsius

Breaking news 📢📢
Alex Mashinsky, the former CEO of Celsius, has agreed to relinquish all claims to the assets of the bankrupt crypto lender, facilitating further distributions to creditors. This agreement, submitted to the U.S. Bankruptcy Court for the Southern District of New York, bars Mashinsky and three associated entities from receiving any bankruptcy proceeds. All claims made by Mashinsky will be withdrawn and will not receive any distribution under the Chapter 11 plan. Consequently, he and his related entities will be permanently excluded from any recovery in the Celsius bankruptcy, allowing the reserved assets to be redistributed to other creditors. The court will maintain oversight of the distribution process while Mashinsky serves a 12-year prison sentence for defrauding customers and manipulating the CEL token's price. Celsius filed for Chapter 11 in July 2022 due to a liquidity crisis and has since transitioned to a recovery-focused entity, distributing over $2.5 billion to around 251,000 creditors by August 2024.

Alex Mashinsky, the founder and former CEO of the cryptocurrency lending platform Celsius Network, has been sentenced to 12 years in federal prison for orchestrating a multi-billion-dollar fraud scheme that misled investors and manipulated the market.
🏦 What Happened?
Mashinsky launched Celsius in 2017, promoting it as a safe, high-yield alternative to traditional banking. The platform attracted over $25 billion in customer assets by offering interest rates as high as 18.6% on crypto deposits. However, in July 2022, Celsius collapsed, freezing $4.7 billion in customer funds and revealing a $1.2 billion financial gap.

In December 2024, former Celsius CEO Alex Mashinsky pleaded guilty to securities fraud and commodities fraud. He admitted to:
1 Misleading customers about the financial health of Celsius and the safety of their investments.
2 Using customer funds for high-risk investments without proper disclosure.
3 Manipulating the price of Celsius’s native token (CEL) by orchestrating large-scale purchases to inflate its value, while secretly selling his own holdings for personal gain.
On May 8, 2025, U.S. District Judge John G. Koeltl sentenced Mashinsky to 12 years in federal prison. Prosecutors had sought a 20-year sentence, emphasizing the deliberate and deceptive nature of his actions and his lack of remorse. The judge noted that the fraud was the result of deliberate decisions rather than market conditions or negligence.
📉 The Fallout
The collapse of Celsius left many investors, including retail customers, with significant losses. At its peak, Celsius managed over $25 billion in assets, but its bankruptcy in 2022 left a substantial financial gap, with only about 60% of customer funds partially recovered.
Do you think 12 years is enough for crypto fraud on this scale?
#crypto #newscrypto #Fraud_alert #Celsius #AlexMashinsky

Celsius Fights for Compensation from FTX
Celsius Network, the defunct crypto lending platform, has filed an appeal after Judge John Dorsey rejected its $444 million damage claim against FTX. This legal battle is part of the ongoing FTX bankruptcy proceedings, aimed at addressing losses from the collapse of the crypto exchange led by Sam Bankman-Fried.
Original $2 Billion Claim Reduced to $444 Million
Initially, Celsius sought up to $2 billion in damages, alleging that misleading statements about its financial stability made by FTX officials accelerated its collapse in 2022.
Later, Celsius reduced its claim to $444 million, focusing on so-called “preferential transfers,” which could prioritize repayments to specific creditors.
FTX and Court Reject Celsius’ Claims
FTX debtors argued that the evidence provided by Celsius was insufficient to support its claim. They also noted that the amended $444 million claim was submitted too late.
In December 2023, Judge Dorsey dismissed both the original $2 billion claim and the amended $444 million version, citing insufficient evidence. He added that Celsius had not requested permission to amend its claims or provided an explanation for the delay in submitting them.
Celsius Faces Additional Legal Challenges
In November 2024, Celsius pledged to distribute $127 million to creditors from its litigation recovery account. In the same month, a New York federal judge denied former Celsius CEO Alex Mashinsky’s attempt to dismiss fraud charges.
Mashinsky faces allegations of manipulating the price of Celsius’ native token, CEL, and fraud linked to the company’s collapse. If convicted, he could face up to 115 years in prison.
Conclusion
Celsius Network continues to pursue compensation from FTX, emphasizing disputes over evidence and timing. Meanwhile, the company and its former executives face significant legal challenges, complicating efforts to rebuild trust and achieve fair settlements with creditors.

#LegalBattle , #Celsius , #FTX , #CryptoNewss , #bankruptcy

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