Insolvency RecordCASE FILES

United States ยท Cryptocurrency lending

Celsius Network LLC and affiliates insolvency: proceedings and outcome

Celsius Network, a New Jersey-based cryptocurrency lending platform, paused customer withdrawals on 13 June 2022 and filed for Chapter 11 on 13 July 2022. A US bankruptcy court approved its restructuring plan in November 2023 and the company announced its emergence on 31 January 2024, with distributions to creditors and a new creditor-owned bitcoin mining company, Ionic Digital. Founder Alexander Mashinsky pleaded guilty to commodities fraud and securities fraud and was sentenced to 12 years in prison.

Restructured Under the confirmed plan, Celsius distributed crypto and cash to creditors and transferred mining operations to Ionic Digital, a new company owned by creditors. The Celsius apps were shut down on 29 February 2024.5

First filing13 July 2022
Liabilities reportedUSD 5.5 billion
Proceedings1

Total liabilities and a 1.2 billion USD balance sheet deficit per a first-day declaration, as reported by Wikipedia. US prosecutors said customers had 4.7 billion USD in inaccessible assets on the platform. Figures as of 14 July 2022.5,1

Proceedings

TypeCourt or bodyCaseFiled
Chapter 111,5US Bankruptcy Court, United States13 July 2022

Timeline

  1. Celsius paused all customer withdrawals, citing extreme market conditions.5
  2. Celsius filed for bankruptcy.1
  3. US prosecutors charged founder Alexander Mashinsky, and the FTC announced a settlement with Celsius including a 4.7 billion USD judgment, suspended so assets could be returned to consumers in bankruptcy.4,3
  4. The US bankruptcy court approved the restructuring plan.5
  5. Celsius announced it had emerged from bankruptcy and began distributing over 3 billion USD in crypto and fiat currency to creditors.5
  6. Alexander Mashinsky pleaded guilty before US District Judge John G. Koeltl to one count of commodities fraud and one count of securities fraud.2
  7. Alexander Mashinsky was sentenced to 12 years in prison.1

Creditor recovery

Over 3 billion USD in cryptocurrency and fiat currency distributed to creditors from early 2024, according to reports cited by Wikipedia.5

Related actions

  1. US Federal Trade Commission. Settled with Celsius and affiliates, including a permanent ban on offering asset deposit and withdrawal products and a 4.7 billion USD judgment suspended so assets can be returned through bankruptcy.4
  2. US District Court, Southern District of New York (Judge John G. Koeltl). Alexander Mashinsky, having pleaded guilty on 3 December 2024 to one count of commodities fraud and one count of securities fraud, was sentenced to 12 years in prison, three years of supervised release, a 50,000 USD fine and forfeiture of 48,393,446 USD.1,2

Sources

  1. US Attorney's Office, Southern District of New York, Founder Of Celsius Sentenced To 12 Years For Fraud And Market Manipulation (8 May 2025)
  2. US Attorney's Office, Southern District of New York, Celsius Founder And Former CEO Alexander Mashinsky Pleads Guilty To Multi-Billion Dollar Fraud And Market Manipulation Schemes (3 December 2024)
  3. US Attorney's Office, Southern District of New York, Celsius Founder And Former Chief Revenue Officer Charged In Connection With Multibillion-Dollar Fraud And Market Manipulation Schemes (13 July 2023)
  4. US Federal Trade Commission, FTC Reaches Settlement with Crypto Platform Celsius Network, Charges Former Executives with Duping Consumers (13 July 2023)
  5. Wikipedia, Celsius Network (27 October 2026)