Alex Mashinsky Forfeits Millions in Celsius Assets as Bankruptcy Drama Unfolds

Another crypto CEO bites the dust—this time with a nine-figure price tag.

As Celsius' bankruptcy saga drags on, former CEO Alex Mashinsky just got handed a financial gut-punch. Court filings reveal he's forfeiting all rights to company assets—including those juicy executive accounts.

Here's the kicker: This plays out while retail investors still wait for scraps.

The move comes as bankruptcy trustees claw back funds from insiders. Mashinsky's forfeiture suggests regulators aren't buying the 'rogue algorithm' defense anymore.

One bankruptcy attorney quipped: 'Turns out 'decentralized finance' still answers to centralized courts.'

Celsius bankruptcy

Celsius halted user withdrawals in June 2022, locking up nearly $4.7 billion in customer funds, amid the market instability driven by LUNA’s collapse in the prior month.

The company was forced to file for Chapter 11 bankruptcy in July 2022, triggering investigations into its financial practices and the conduct of its leadership.

Mashinsky was arrested in 2023 over several fraud-related charges and later pleaded guilty as part of his legal proceedings. Prosecutors claimed that he misled investors about the company’s financial health while offloading personal holdings of Celsius’s native token. They added that his actions gave users false confidence even as the platform was nearing collapse.

Last month, Mashinsky was sentenced to 12 years in prison, avoiding the 20-year term prosecutors had pursued. His defense argued that a longer sentence WOULD amount to life imprisonment for the 59-year-old.

His downfall joins a growing list of disgraced crypto leaders, including FTX’s Sam Bankman-Fried and Terra’s Do Kwon, who were once industry icons whose collapses have reshaped public and regulatory perceptions of digital assets.