Judge Rules Alex Mashinsky Ineligible for Celsius Bankruptcy Assets
Former Celsius CEO Alex Mashinsky and related entities have forfeited all claims to Celsius’ bankruptcy estate under a court-approved agreement. This decision prioritizes creditor restitution in the ongoing bankruptcy proceedings of the failed crypto lending platform.
Case Background
Alex Mashinsky received a 12-year prison sentence after being convicted of fraud. While his defense cited military service and an early guilty plea, prosecutors had sought a 20-year term for the former Celsius executive.
Bankruptcy Agreement Terms
The settlement filed in New York’s United States Bankruptcy Court prohibits Mashinsky and his affiliated companies (AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC) from receiving any bankruptcy proceeds. This clears the way for Celsius debtors to distribute previously frozen funds.
Creditor Compensation
Celsius creditors have filed claims exceeding $1 billion in 2024. The company distributed $2.5 billion to creditors in August 2024, with plans to allocate an additional $127 million from litigation recoveries.
Key Developments
- 12-year fraud sentence for former CEO Alex Mashinsky
- Court bars Mashinsky from bankruptcy proceeds
- Over $2.5 billion returned to creditors
- Bankruptcy exit settlements reached in 2023
