Verify a decision

{"actor":"system:backfill","investigation_id":"c5f166d2-5939-421c-8e76-941fd0af7104","kind":"publish","page_slug":"celsius","published_at":"2026-05-14T06:01:53.536Z","sequence_num":3,"snapshot":{"content_type":"investigation","entity_name":"Celsius Network","sections":[{"content":"Celsius Network was founded in 2017 by Alex Mashinsky, Daniel Leon, and Hanoch 'Nuke' Goldstein and headquartered in Hoboken, New Jersey. Mashinsky, born in Ukraine and raised in Israel, presented himself as a serial entrepreneur with prior ventures in telecommunications and voice-over-IP technology. The platform's central marketing proposition was 'Unbank Yourself' — the claim that Celsius could replace traditional banks by paying depositors far higher yields than conventional savings accounts, funded by lending customer assets to institutional borrowers. In March 2018, Celsius conducted an initial coin offering (ICO) of its native CEL token, raising approximately $50 million. CEL began trading on cryptocurrency exchanges in April 2018.","heading":"Background and Founding","severity":"medium","sources":[{"credibility":2,"name":"Celsius Network - Wikipedia","type":"other","url":"https://en.wikipedia.org/wiki/Celsius_Network"},{"credibility":2,"name":"Alex Mashinsky - Wikipedia","type":"other","url":"https://en.wikipedia.org/wiki/Alex_Mashinsky"},{"credibility":1,"name":"Who is Celsius CEO Alex Mashinsky? - Fortune","type":"news_article","url":"https://fortune.com/2022/06/13/who-is-celsius-ceo-alex-mashinsky-crypto-crash/"}]},{"content":"Celsius operated as a centralized crypto lender. Customers deposited Bitcoin, Ether, stablecoins, and other digital assets in exchange for interest payments of up to 18.6% APY — rates advertised as far exceeding traditional bank savings accounts. Celsius earned revenue by re-deploying customer deposits: lending assets to institutional and retail borrowers, providing collateralized loans, and deploying funds into decentralized finance (DeFi) protocols. Depositors could also earn higher yields by receiving interest in Celsius's native CEL token rather than in-kind, creating demand for CEL and incentivizing long-term holding. Customers could alternatively borrow against their own crypto holdings using Celsius as a secured lender. By May 2022, Celsius reported approximately $12 billion in assets under management; at its peak it reportedly managed over $20 billion. The platform had issued more than $8 billion in loans. Critically, customer deposits were not segregated or insured, and Celsius's terms of service transferred legal title of deposited assets to Celsius itself — meaning depositors became unsecured creditors in the event of insolvency.","heading":"Business Model and How Celsius Worked","severity":"high","sources":[{"credibility":2,"name":"Celsius Network - Wikipedia","type":"other","url":"https://en.wikipedia.org/wiki/Celsius_Network"},{"credibility":1,"name":"How the fall of Celsius dragged down crypto investors - CNBC","type":"news_article","url":"https://www.cnbc.com/2022/07/17/how-the-fall-of-celsius-dragged-down-crypto-investors.html"},{"credibility":2,"name":"Celsius Network MarketsWiki","type":"other","url":"https://www.marketswiki.com/wiki/Celsius_Network"}]},{"content":"Celsius grew rapidly between 2019 and 2021, capitalizing on low interest rate environments and rising cryptocurrency prices to attract retail depositors seeking yield. At its peak the platform reportedly held more than $20 billion in customer assets. Mashinsky became a prominent public figure in the crypto space, hosting weekly 'Ask Mashinsky Anything' (AMA) livestream sessions on YouTube in which he fielded questions from depositors and frequently assured them of the platform's safety, liquidity, and regulatory standing. The 'Unbank Yourself' slogan resonated widely with retail investors disillusioned with traditional banking. Celsius raised venture capital from prominent investors and received significant media coverage. The platform's aggressive yield promises attracted a broad retail user base, including elderly individuals, retirees, and families with limited financial sophistication. Celsius reported approximately 1.7 million users at the time of its collapse.","heading":"Growth and Marketing","severity":"medium","sources":[{"credibility":1,"name":"Celsius investors owed $4.7 billion beg judge to recover life savings - CNBC","type":"news_article","url":"https://www.cnbc.com/2022/08/02/celsius-investors-owed-4point7-billion-beg-judge-to-recover-life-savings.html"},{"credibility":2,"name":"Celsius Network - Wikipedia","type":"other","url":"https://en.wikipedia.org/wiki/Celsius_Network"}]},{"content":"Celsius's ability to sustain near-20% yields required taking substantial risks with customer assets, risks that were not adequately disclosed to depositors. Several specific failures have been documented. In June 2021, Celsius suffered a loss of at least 35,000 ETH (worth approximately $50 million) when custodian StakeHound disclosed it had lost the private keys to staked ETH deposits held on behalf of clients. Celsius did not publicly disclose this loss to its customers. Celsius also lost approximately $22 million as a result of the BadgerDAO DeFi protocol hack in December 2021, and was found by a blockchain analyst to have forfeited restitution payments from the incident. Celsius deployed significant customer funds into decentralized finance protocols offering leveraged yields, including Anchor Protocol on the Terra/Luna blockchain, which at one point offered 20% APY on the TerraUSD (UST) stablecoin. When the Terra/Luna ecosystem collapsed in May 2022, Celsius withdrew more than $535 million in crypto assets from Anchor, accelerating platform-wide liquidity pressure. Celsius also accumulated a large position in Lido Finance's staked ETH (stETH) token, which traded at a discount to ETH during the June 2022 market stress period. Because stETH could not be redeemed for ETH until after the Ethereum Merge, Celsius was unable to liquidate its position at par to meet withdrawal demand — a fundamental asset-liability mismatch. Celsius also extended allegedly uncollateralized or undercollateralized loans to the crypto hedge fund Three Arrows Capital (3AC), which itself collapsed in June 2022 after suffering catastrophic losses in the Terra/Luna implosion.","heading":"Risk Management Failures","severity":"critical","sources":[{"credibility":2,"name":"The Fall of Celsius Network: A Timeline - CoinDesk","type":"news_article","url":"https://www.coindesk.com/markets/2022/07/15/the-fall-of-celsius-network-a-timeline-of-the-crypto-lenders-descent-into-insolvency"},{"credibility":3,"name":"Why did Celsius Network fail? - Medium/AlgoTune","type":"other","url":"https://medium.com/algotune/why-did-celsius-network-fail-a-deep-dive-into-celsius-chapter-11-filing-959ca897168a"},{"credibility":2,"name":"Zero Degrees Celsius: A Deep Dive into the Celsius Liquidity Crisis - Caleb & Brown","type":"other","url":"https://calebandbrown.com/blog/why-crypto-lender-celsius-froze-withdrawals/"},{"credibility":1,"name":"A Retrospective on the Crypto Runs of 2022 - Federal Reserve Bank of Chicago","type":"research","url":"https://www.chicagofed.org/publications/chicago-fed-letter/2023/479"}]},{"content":"On June 12, 2022, Celsius published a brief announcement stating it was pausing all withdrawals, swaps, and transfers between accounts, citing 'extreme market conditions.' No prior warning was given to depositors. In the weeks leading up to the freeze, Mashinsky had publicly denied reports of financial difficulty. During a YouTube AMA session, he stated 'Celsius has billions in liquidity, right, and we provide immediate access to everybody' — a statement later characterized by prosecutors as a knowing lie. Platform outflows had exceeded inflows every week since early May 2022, the period of the Terra collapse. Following the freeze, Celsius laid off approximately 150 employees — roughly one quarter of its workforce — in early July 2022. On July 13, 2022, Celsius filed for Chapter 11 bankruptcy protection in the Southern District of New York. Bankruptcy filings disclosed a $1.2 billion deficit: the company held approximately $4.3 billion in assets against $5.5 billion in liabilities. Of total liabilities, approximately $4.7 billion was owed directly to customers, who were classified as unsecured creditors. The filings also revealed that Celsius had listed approximately $600 million in CEL token as an asset, despite the token's total market capitalization being only approximately $170 million at the time of filing — a significant apparent overvaluation.","heading":"The Collapse: Withdrawal Freeze and Bankruptcy","severity":"critical","sources":[{"credibility":1,"name":"Crypto Lender Celsius Files for Bankruptcy After Freezing Withdrawals - Bloomberg","type":"news_article","url":"https://www.bloomberg.com/news/articles/2022-07-14/crypto-lender-celsius-files-for-bankruptcy-in-cash-crunch"},{"credibility":2,"name":"Celsius Acknowledges $1.2B Hole in Balance Sheet - CoinDesk","type":"news_article","url":"https://www.coindesk.com/business/2022/07/14/celsius-acknowledges-12b-hole-in-balance-sheet"},{"credibility":1,"name":"Celsius Network Files Chapter 11 Bankruptcy - Vermont DFR","type":"regulatory","url":"https://dfr.vermont.gov/consumer-alert/celsius-network-files-chapter-11-bankruptcy"},{"credibility":2,"name":"Celsius Bankruptcy Filing Shows $1.2 Billion Hole - Decrypt","type":"news_article","url":"https://decrypt.co/105136/celsius-bankruptcy-filing-1-2-billion-hole"}]},{"content":"Federal prosecutors and regulators alleged, and Mashinsky ultimately admitted, that Celsius systematically misled depositors about the safety of their funds, the nature of the platform's operations, and the status of its regulatory compliance. According to the DOJ indictment and Mashinsky's own guilty plea, Mashinsky publicly claimed Celsius had regulatory consent for its operations and that his own CEL token holdings were not being sold — both statements were false. He admitted that in 2019 he was actively selling CEL tokens even while publicly denying doing so, knowing customers would draw 'false comfort' from his claimed inaction. In the weeks before the June 2022 withdrawal freeze, Mashinsky made multiple public statements asserting Celsius was solvent and liquid. Prosecutors alleged Celsius was simultaneously using new customer deposits to fund withdrawals from departing customers — a structure consistent with a Ponzi-like scheme. An independent court-appointed examiner found that Celsius used customer funds to artificially prop up the price of the CEL token on open markets, a fact concealed from depositors. Celsius's public disclosures about its buyback activity significantly understated the volume of purchases being made.","heading":"Fraud and Misrepresentation","severity":"critical","sources":[{"credibility":2,"name":"Alex Mashinsky Pleads Guilty to Fraud - CoinDesk","type":"news_article","url":"https://www.coindesk.com/policy/2024/12/03/alex-mashinsky-founder-and-former-ceo-of-celsius-pleads-guilty-to-fraud"},{"credibility":1,"name":"Celsius Network founder pleads guilty to fraud charges - Fortune","type":"news_article","url":"https://fortune.com/crypto/2024/12/04/celsius-network-founder-guilty-fraud-collapse-crypto-lending-platform/"},{"credibility":2,"name":"Celsius Was Allegedly Propping Up Its Own Crypto Token With Customer Funds - Yahoo Finance","type":"news_article","url":"https://news.yahoo.com/celsius-allegedly-propping-own-crypto-151500956.html"},{"credibility":2,"name":"Crypto lender Celsius propped up token price with user funds - Ledger Insights","type":"news_article","url":"https://www.ledgerinsights.com/crypto-lender-celsius-propped-up-token-price/"}]},{"content":"A central element of the fraud involved Celsius's use of customer funds to purchase its own CEL token on open markets in order to artificially support and inflate CEL's price. Blockchain analytics firm Arkham Intelligence estimated that Celsius had spent approximately $350 million purchasing CEL since July 2019. A court-appointed independent examiner concluded that Celsius was using both investor money and customer funds for these purchases, and that company executives had misled customers about the extent of Celsius's CEL buying activity, fearing community backlash. While Celsius was propping up CEL's price with customer funds, insiders were selling. The examiner found that Mashinsky had sold over $68 million worth of CEL since 2018. Co-founder Daniel Leon sold at least $9.7 million worth of CEL, and co-founder Nuke Goldstein sold approximately $2.8 million. Former Chief Revenue Officer Roni Cohen-Pavon sold at least $3.6 million. All of these sales occurred while the company was publicly presenting CEL as a sound investment and while executives were making public statements supportive of the token. In his December 2024 guilty plea, Mashinsky admitted to the commodity fraud counts related to CEL manipulation and agreed to forfeit approximately $48 million.","heading":"CEL Token Manipulation","severity":"critical","sources":[{"credibility":2,"name":"Celsius co-founders cashed out over $42 million shortly before collapse - Calcalist Tech","type":"news_article","url":"https://www.calcalistech.com/ctechnews/article/rjvxrtnms"},{"credibility":2,"name":"Crypto lender Celsius propped up token price with user funds - Ledger Insights","type":"news_article","url":"https://www.ledgerinsights.com/crypto-lender-celsius-propped-up-token-price/"},{"credibility":2,"name":"Alex Mashinsky Pleads Guilty to Fraud - CoinDesk","type":"news_article","url":"https://www.coindesk.com/policy/2024/12/03/alex-mashinsky-founder-and-former-ceo-of-celsius-pleads-guilty-to-fraud"}]},{"content":"On July 13, 2023, the U.S. Department of Justice announced criminal charges against Alex Mashinsky and former Celsius Chief Revenue Officer Roni Cohen-Pavon. A federal grand jury indicted Mashinsky on seven counts: securities fraud, commodities fraud, wire fraud, and conspiracy to manipulate the price of the CEL token. Mashinsky was arrested in New York, pleaded not guilty, and was released on a $40 million bond. Cohen-Pavon was charged separately and subsequently cooperated with prosecutors. The DOJ entered into a non-prosecution agreement with Celsius Network itself, as the company had accepted responsibility for its role in the alleged schemes and was cooperating with investigators. On December 3, 2024, Mashinsky reversed course and pleaded guilty to two of the seven counts: commodities fraud and the fraudulent scheme to manipulate CEL's price. Under the plea agreement, he agreed to forfeit $48 million in gains. On May 8, 2025, U.S. District Judge John Koeltl sentenced Mashinsky to 12 years in federal prison, plus three years of supervised release and a $48.4 million forfeiture — one of the longest sentences arising from the 2022 crypto lending crisis. Federal prosecutors had sought at least 20 years. Mashinsky was ordered to self-report to prison in September 2025.","heading":"Criminal Charges and DOJ Action","severity":"critical","sources":[{"credibility":1,"name":"Ex-Celsius CEO is charged with fraud - CNN Business","type":"news_article","url":"https://www.cnn.com/2023/07/13/business/celsius-alex-mashinsky-charged-with-fraud/index.html"},{"credibility":1,"name":"Celsius founder Alex Mashinsky pleads guilty to two fraud counts - Al Jazeera","type":"news_article","url":"https://www.aljazeera.com/news/2024/12/3/celsius-founder-alex-mashinsky-pleads-guilty-to-two-fraud-counts"},{"credibility":2,"name":"Former Celsius Network CEO Alex Mashinsky Sentenced to 12 Years - Decrypt","type":"news_article","url":"https://decrypt.co/318623/former-celsius-network-ceo-alex-mashinsky-sentenced-12-years-prison"},{"credibility":1,"name":"Celsius CEO Alex Mashinsky sentenced to 12 years - NBC News","type":"news_article","url":"https://www.nbcnews.com/business/markets/celsius-ceo-alex-mashinsky-sentenced-12-years-multibillion-crypto-rcna205655"},{"credibility":2,"name":"Celsius Founder Alex Mashinsky Sentenced to 12 Years - CoinDesk","type":"news_article","url":"https://www.coindesk.com/policy/2025/05/08/celsius-founder-alex-mashinsky-sentenced-to-12-years-in-prison-for-fraud"},{"credibility":1,"name":"United States v. Mashinsky - CourtListener","type":"court_filing","url":"https://www.courtlistener.com/docket/67604393/united-states-v-mashinsky/"}]},{"content":"Coordinated with the DOJ's arrest of Mashinsky on July 13, 2023, three additional federal regulatory agencies filed civil enforcement actions. The SEC charged Celsius Network and Mashinsky with violating registration and anti-fraud provisions of federal securities laws. The SEC alleged that the Earn Interest Program constituted an unregistered offer and sale of securities from at least 2018, that Celsius and Mashinsky made false and misleading statements to investors, and that Celsius and Mashinsky engaged in market manipulation through undisclosed CEL buybacks. The CFTC filed a complaint in the Southern District of New York charging Mashinsky and Celsius with fraud and material misrepresentations in connection with a commodity pool scheme, and with operating as an unregistered commodity pool operator. The FTC entered into a settlement agreement with Celsius under which a judgment of $4.7 billion was imposed — suspended to allow funds to be returned to customers through the bankruptcy proceeding — and permanently banned Celsius from offering any crypto deposit or investment product. The FTC's case against Mashinsky personally proceeded separately; in 2025 Mashinsky reached a $10 million settlement with the FTC and received a lifetime ban from the financial services industry.","heading":"SEC, CFTC, and FTC Actions","severity":"critical","sources":[{"credibility":1,"name":"SEC Charges Celsius Network Limited and Founder Alex Mashinsky - SEC.gov","type":"regulatory","url":"https://www.sec.gov/newsroom/press-releases/2023-133"},{"credibility":1,"name":"CFTC Charges Alexander Mashinsky and Celsius Network with Fraud - CFTC.gov","type":"regulatory","url":"https://www.cftc.gov/PressRoom/PressReleases/8749-23"},{"credibility":1,"name":"FTC Reaches Settlement with Crypto Platform Celsius Network - FTC.gov","type":"regulatory","url":"https://www.ftc.gov/news-events/news/press-releases/2023/07/ftc-reaches-settlement-crypto-platform-celsius-network-charges-former-executives-duping-consumers"},{"credibility":2,"name":"Celsius founder Alex Mashinsky reaches $10 million FTC settlement - The Block","type":"news_article","url":"https://www.theblock.co/post/399421/celsius-founder-alex-mashinsky-hit-4-7-billion-ftc-judgement-lifetime-crypto-ban"},{"credibility":2,"name":"Federal Agencies Coordinate Action Against Celsius - Jones Day","type":"other","url":"https://www.jonesday.com/en/insights/2023/07/federal-agencies-coordinate-action-against-celsius-for-fraud-and-manipulation"}]},{"content":"Celsius filed for Chapter 11 bankruptcy on July 13, 2022, in the Southern District of New York. Bankruptcy proceedings revealed contested legal questions about whether customer funds deposited in the Earn account were customer property or Celsius property, a question that a bankruptcy judge ultimately resolved largely in favor of Celsius — meaning those depositors were unsecured creditors. Celsius completed a court-supervised auction process in May 2023, selecting the Fahrenheit LLC consortium as the winning bidder. In November 2023, the bankruptcy court confirmed a reorganization plan that had been approved by approximately 98% of voting account holders. The plan projected a recovery of between 67% and 85% of customer holdings, primarily distributed in Bitcoin and Ether. On January 31, 2024, Celsius formally emerged from bankruptcy and began distributing over $3 billion in cryptocurrency and fiat to creditors. The plan also created Ionic Digital, Inc., a new Bitcoin mining company owned by Celsius creditors, with mining operations managed by Hut 8 Corp. under a four-year management agreement.","heading":"Bankruptcy Proceedings and Creditor Recovery","severity":"high","sources":[{"credibility":2,"name":"Celsius Emerges from Chapter 11 and Commences Distributions - BusinessWire","type":"official","url":"https://www.businesswire.com/news/home/20240131994097/en/Celsius-Emerges-from-Chapter-11-and-Commences-Distributions-of-Over-$3-Billion-of-Cryptocurrency-to-Creditors"},{"credibility":2,"name":"Celsius to Transition to Mining-Only NewCo - BusinessWire","type":"official","url":"https://www.businesswire.com/news/home/20231120725219/en/"},{"credibility":1,"name":"Celsius to exit bankruptcy in early 2024 - Fortune","type":"news_article","url":"https://fortune.com/crypto/2023/11/10/celsius-bankruptcy-resolution-2-billion-customers-newco-staking-mining/"},{"credibility":1,"name":"Celsius Network LLC - Stretto (Bankruptcy Case Docket)","type":"court_filing","url":"https://cases.stretto.com/celsius/"}]},{"content":"At the time of the withdrawal freeze, Celsius owed approximately $4.7 billion to approximately 1.7 million users, the vast majority of whom were retail investors. Customer funds remained frozen from June 12, 2022 until distributions began in early 2024 — a period of approximately 18 months. Letters submitted to the bankruptcy court from more than 100 depositors described severe personal hardship including lost retirement savings, depleted college funds, defaulted mortgages, and medical emergencies. Affected depositors included elderly individuals on fixed incomes, healthcare workers, and families who had treated Celsius as a savings account based on Mashinsky's public assurances of safety. Federal prosecutors at sentencing described Mashinsky as a 'predator' whose victims lost access to money they could not afford to lose. The court acknowledged that some customers lost everything. Total customer losses from the Celsius collapse — including the lost value of the CEL token held by retail investors — have been estimated at up to $5 billion or more.","heading":"Victim Impact","severity":"critical","sources":[{"credibility":1,"name":"Celsius investors owed $4.7 billion beg judge to recover life savings - CNBC","type":"news_article","url":"https://www.cnbc.com/2022/08/02/celsius-investors-owed-4point7-billion-beg-judge-to-recover-life-savings.html"},{"credibility":1,"name":"Elderly widows, paycheck-to-paycheck families lost life savings - Fortune","type":"news_article","url":"https://fortune.com/2022/08/04/celsius-crypto-collapse-debtors-regulation-bankruptcy-letters/"},{"credibility":2,"name":"Excerpts from letters to judge in Celsius bankruptcy - Molly White","type":"other","url":"https://blog.mollywhite.net/celsius-letters/"},{"credibility":1,"name":"Celsius Network owes its customers $4.7B - Fortune","type":"news_article","url":"https://fortune.com/2022/08/19/celsius-network-bankruptcy-customers-savings-court/"}]},{"content":"Celsius's collapse was both a product of and a contributor to the broader crypto lending crisis of 2022. The Terra/Luna ecosystem collapse in May 2022 was a precipitating stress event, draining liquidity from multiple platforms simultaneously. Celsius had direct exposure to Anchor Protocol on the Terra blockchain. Three Arrows Capital (3AC), a large crypto hedge fund that itself collapsed in June 2022, had allegedly received uncollateralized or undercollateralized loans from Celsius. The stETH de-peg affected both Celsius and 3AC simultaneously, as both held large stETH positions that could not be liquidated at par. The cascading failures of Celsius, 3AC, and Voyager Digital — which itself had large exposure to 3AC — demonstrated systemic interconnection risks within the centralized crypto lending sector that were not visible to retail depositors. The Federal Reserve Bank of Chicago characterized the 2022 events as a 'crypto run' analogous in structure to a traditional bank run, noting that the fundamental vulnerability was maturity and liquidity mismatches between short-term customer withdrawal rights and long-term or illiquid asset deployments.","heading":"Contagion and Broader Crypto Lending Collapse","severity":"high","sources":[{"credibility":1,"name":"A Retrospective on the Crypto Runs of 2022 - Federal Reserve Bank of Chicago","type":"research","url":"https://www.chicagofed.org/publications/chicago-fed-letter/2023/479"},{"credibility":1,"name":"Leading crypto analysis firm reveals contagion in the markets - Fortune","type":"news_article","url":"https://fortune.com/2022/06/29/crypto-winter-crash-nansen-three-arrows-capital-celsius-ether-staked-depeg/"},{"credibility":1,"name":"Is the Celsius freeze a Lehman Brothers moment for crypto? - Fortune","type":"news_article","url":"https://fortune.com/crypto/2022/06/16/lehman-brothers-crypto-crash-celsius-luna-bear-stearns-recession/"}]},{"content":"In retrospect, several red flags were visible prior to the collapse that observers and regulators have identified as warning signs. Celsius offered yields of up to 18.6% APY — rates that were not sustainably achievable through prudent lending practices in any sustained market environment and that should have prompted scrutiny of the underlying risk. Celsius operated as an unregistered securities issuer for years, operating in regulatory gray areas that its executives were aware of. Customer deposits were transferred to Celsius's ownership, not held in trust, a provision that relegated depositors to unsecured creditor status in insolvency. The company lacked transparent public financial disclosures of the type required of regulated financial institutions. Celsius's heavy investment in its own CEL token — and the undisclosed use of customer funds to support CEL's price — created a massive undisclosed conflict of interest. Celsius's weekly AMA sessions created the appearance of transparency while allowing Mashinsky to disseminate misleading assurances. Multiple state regulators had issued cease and desist letters to Celsius in 2021 and 2022 over unregistered securities offerings, a fact that was publicly available but not prominently disclosed to depositors. Investors who had inquired about Celsius's investment strategies received only high-level, vague descriptions rather than audited balance sheets or detailed risk disclosures.","heading":"Red Flags and Lessons","severity":"high","sources":[{"credibility":1,"name":"SEC Charges Celsius Network Limited and Founder Alex Mashinsky - SEC.gov","type":"regulatory","url":"https://www.sec.gov/newsroom/press-releases/2023-133"},{"credibility":1,"name":"CFTC Charges Alexander Mashinsky and Celsius Network - CFTC.gov","type":"regulatory","url":"https://www.cftc.gov/PressRoom/PressReleases/8749-23"},{"credibility":1,"name":"DFR Encourages Celsius Network Investors to Proceed with Caution - Vermont DFR","type":"regulatory","url":"https://dfr.vermont.gov/consumer-alert/dfr-encourages-celsius-network-investors-proceed-caution"}]}],"sources_used":[],"summary":"Celsius Network was a crypto lending and yield platform founded in 2017 by Alex Mashinsky that promised depositors interest rates as high as 18.6% APY under the slogan 'Unbank Yourself.' On June 12, 2022, Celsius froze all withdrawals without warning, trapping approximately $4.7 billion in customer funds; it filed for Chapter 11 bankruptcy on July 13, 2022, revealing a $1.2 billion hole in its balance sheet. Mashinsky was arrested on federal fraud charges in July 2023, pleaded guilty to commodities fraud and token price manipulation in December 2024, and was sentenced to 12 years in federal prison on May 8, 2025.","timeline":[{"date":"2017-01-01","event":"Celsius Network founded by Alex Mashinsky, Daniel Leon, and Nuke Goldstein","source":""},{"date":"2018-03-01","event":"Celsius conducts ICO for CEL token, raising approximately $50 million","source":""},{"date":"2018-04-01","event":"CEL token begins trading on cryptocurrency exchanges","source":""},{"date":"2021-06-01","event":"StakeHound discloses loss of private keys to staked ETH; Celsius loses at least 35,000 ETH (~$50M) but does not disclose this to customers","source":""},{"date":"2021-12-01","event":"BadgerDAO hack; Celsius loses approximately $22 million and later forfeits restitution payments","source":""},{"date":"2022-05-01","event":"Terra/Luna ecosystem collapses; Celsius withdraws $535M+ from Anchor Protocol; weekly platform outflows begin exceeding inflows","source":""},{"date":"2022-06-10","event":"Blockchain analysts identify Celsius's large stETH exposure; stETH begins trading at a discount to ETH","source":""},{"date":"2022-06-12","event":"Celsius freezes all withdrawals, swaps, and transfers citing 'extreme market conditions,' trapping approximately $4.7 billion in customer funds","source":""},{"date":"2022-06-15","event":"Three Arrows Capital fails to meet margin calls; broader crypto lending contagion accelerates","source":""},{"date":"2022-07-01","event":"Celsius lays off approximately 150 employees (roughly 25% of workforce)","source":""},{"date":"2022-07-13","event":"Celsius files for Chapter 11 bankruptcy in the Southern District of New York, disclosing a $1.2 billion deficit","source":""},{"date":"2023-05-01","event":"Celsius completes court-supervised auction; Fahrenheit LLC consortium selected as winning bidder","source":""},{"date":"2023-07-13","event":"DOJ arrests Alex Mashinsky on seven counts of fraud and conspiracy; SEC, CFTC, and FTC simultaneously file civil actions; FTC reaches $4.7 billion settlement with Celsius","source":""},{"date":"2023-11-09","event":"U.S. Bankruptcy Court confirms Celsius reorganization plan; approximately 98% of account holders vote in favor","source":""},{"date":"2024-01-31","event":"Celsius emerges from bankruptcy and begins distributing over $3 billion in cryptocurrency and fiat to creditors; Ionic Digital (Bitcoin mining) created as creditor-owned entity","source":""},{"date":"2024-12-03","event":"Alex Mashinsky pleads guilty to commodities fraud and CEL token price manipulation; agrees to forfeit $48 million","source":""},{"date":"2025-05-08","event":"U.S. District Judge John Koeltl sentences Mashinsky to 12 years in federal prison, plus $48.4 million forfeiture, in the Southern District of New York","source":""}]},"v":1}