Key Takeaways
- Celsius managed over $25 billion in crypto in 2021 before collapsing in 2022.
- Celsius investors are estimated to have lost around $7 billion in real value.
- Mashinsky will serve 12 years in prison for fraud and market manipulation charges.
With a 12-year prison sentence looming, Alex Mashinsky, the former CEO of defunct crypto platform Celsius, has been denied any right to claim or receive assets as part of the bankruptcy process.
Now, joining the likes of Sam Bankman-Fried, Do Kwon, and other disgraced crypto figures from 2022, Mashinsky is set to leave prison in his seventies.
Celsius Bankruptcy
According to a recent filing from the U.S. Bankruptcy Court for the Southern District of New York, all debtor claims by, or on behalf of, Mashinsky, AM Venture Holdings Inc., Koala1 LLC, and Koala3 LLC are “withdrawn, disallowed, and shall receive no distribution” under the bankruptcy plan.
In June 2022, Celsius froze customer withdrawals from the platform, citing “extreme market conditions.”
Approximately $4.7 billion was locked up in the platform at the time. A month later, Celsius filed for Chapter 11 bankruptcy, leading to Mashinsky’s swift arrest.
Mashinsky would later plead guilty to committing fraud.
Prosecutors had pushed for a 20-year sentence, though his defence argued this would be a “death-in-prison” sentence for the 59-year-old.
Now, Mashinsky is set to leave prison in his seventies for his role in one of 2022’s largest crypto collapses.
Crypto 2022
The Celsius collapse coincided with several other major crypto washouts in 2022, with the likes of BlockFi and Voyager Digital filing for bankruptcy following the FTX collapse.
Similarly, Celsius, Three Arrows Capital, and others were heavily affected by the collapse of Do Kwon’s TerraUSD stablecoin and the Luna crypto.
However, much like FTX, investigations into Celsius found that Mashinsky was heavily engaged in commodities fraud and had been manipulating the platform’s native crypto.
Mashinsky admitted to knowingly making risky market bets with customer assets, profiting millions of dollars “whilst his customers lost billions.”
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
