Celsius Network Collapse
Celsius froze customer withdrawals in June 2022 and filed for bankruptcy the following month. The company had marketed crypto deposits as a way to earn interest.
Celsius offered customers interest for depositing cryptocurrency. Its founder, Alex Mashinsky, promoted the company as a place where customers could earn returns on their holdings. When Celsius suspended withdrawals, customers lost access to their deposits.
The bankruptcy and a subsequent criminal case exposed a gap between what customers were told and what Celsius did with their money. Federal prosecutors said Mashinsky misled customers about the safety of the business and manipulated the price of its CEL token while selling his own holdings.
Mashinsky pleaded guilty to commodities fraud and securities fraud in December 2024. A federal judge sentenced him to 12 years in prison in May 2025.
Bibliography:
- U.S. Attorney’s Office, Southern District of New York. (2024, December 3). Celsius founder and former CEO Alexander Mashinsky pleads guilty to multi-billion dollar fraud and market manipulation schemes.
- U.S. Attorney’s Office, Southern District of New York. (2025, May 8). Founder of Celsius sentenced to 12 years for fraud and market manipulation.