Celsius CEO Alex Mashinsky Denied Any Payout in Bankruptcy Showdown

Crypto's fallen prince gets a reality check.

Bankruptcy court slams the door on Mashinsky's golden parachute.

Once hailed as a DeFi visionary, the Celsius founder now joins the growing list of crypto executives learning that play stupid games, win stupid prizes.

Creditors cheer as judge delivers poetic justice—because nothing says 'market correction' like watching a billionaire get treated like the rest of us.

TLDR

• Alex Mashinsky has forfeited all claims to Celsius bankruptcy proceeds following a court agreement.
• The agreement also bars three Mashinsky-linked entities from receiving any distribution from the Celsius estate.
• The bankruptcy court will retain jurisdiction to oversee the enforcement of the agreement.
• Celsius has already distributed over $2.5 billion to approximately 251,000 creditors.
• Around 121,000 Celsius creditors have not yet claimed their funds, most being owed under $100.

Celsius has moved forward in its bankruptcy process as former CEO Alex Mashinsky forfeited all claims to its assets. The agreement clears the path for further creditor distributions while ensuring Mashinsky receives no proceeds from the Celsius bankruptcy estate. The bankruptcy court confirmed the forfeiture agreement in the Southern District of New York.

The filing removes Mashinsky and three associated entities from any financial recovery under the Celsius Chapter 11 plan. The court has barred Mashinsky, AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC from receiving any distribution. Celsius, which filed for bankruptcy in July 2022, continues to prioritize creditor recovery.

With Mashinsky’s claims withdrawn and disallowed, Celsius can now redirect those reserved assets to other eligible creditors. This MOVE aligns with the company’s court-approved recovery strategy. Additionally, the court retains jurisdiction over ongoing matters related to the stipulation.

Alex Mashinsky Barred from All Recovery in Celsius Case

Under the new agreement, Mashinsky permanently loses access to any recovery tied to Celsius. All claims submitted on his behalf are nullified, and no payout will be issued to him or the listed entities. This outcome follows his December guilty plea to criminal charges.

Mashinsky received a 12-year federal sentence for defrauding Celsius customers and manipulating the CEL token’s market price. Prosecutors stated he misused customer funds and misrepresented Celsius’s financial condition. Though they had sought 20 years, the court imposed a reduced sentence due to mitigating factors.

His legal team described the original request as excessive, referencing Mashinsky’s military service and cooperation. However, the court focused on customer losses and his misleading conduct. Celsius creditors expressed approval as this agreement improves the recovery rate.

Celsius Creditor Payouts Continue as Bankruptcy Nears End

Since Celsius entered bankruptcy, it has distributed over $2.5 billion across several rounds to approximately 251,000 creditors. These distributions covered 93% of total approved claims, including nearly two-thirds of eligible creditors from 165 countries. The company remains committed to maximizing recovery for remaining creditors.

Despite significant progress, about 121,000 Celsius creditors have yet to claim their funds. Most of these creditors are owed less than $100 each. Celsius urges them to complete their claims through the designated platform.