Celsius Network Cryptocurrency Bankruptcy & Investor Fraud Litigation
Case Overview
Celsius Network marketed itself as a safe, high-yield alternative to traditional banking, promising customers annual returns of up to 18% on deposited cryptocurrency. In June 2022, the company abruptly froze all customer withdrawals, swaps, and transfers — trapping approximately $4.7 billion in customer funds — before filing for Chapter 11 bankruptcy the following month. Founder and CEO Alex Mashinsky was subsequently arrested in July 2023 and criminally charged with securities fraud, commodities fraud, and wire fraud by the U.S. Department of Justice, with the SEC, CFTC, and FTC filing parallel civil actions alleging he misled investors about the company's financial health and the safety of deposits.
The bankruptcy proceeding, which consolidated hundreds of thousands of creditor claims, resulted in a court-confirmed reorganization plan in late 2023 under which a new entity — Fahrenheit — took over Celsius's mining assets, with creditors set to receive a combination of liquid cryptocurrency and equity in the reorganized company. Estimates suggest creditors may recover roughly 67–85 cents on the dollar depending on asset class, a figure still subject to ongoing litigation over preferential transfers and Mashinsky's personal liability. The criminal case against Mashinsky proceeded to trial in 2025.
Who May Qualify
Individuals or entities that held cryptocurrency deposits, earn accounts, or loan collateral on the Celsius Network platform as of the freeze date of June 12, 2022, and filed a proof of claim in the bankruptcy proceeding.
Frequently Asked Questions
Will Celsius Network customers get their money back?
Under the confirmed bankruptcy reorganization plan, creditors are expected to recover an estimated 67–85% of their claims in a combination of cryptocurrency and equity in a new company, though final recovery amounts depend on ongoing asset liquidation and litigation outcomes.
Was Celsius Network founder Alex Mashinsky charged with a crime?
Yes. Alex Mashinsky was arrested in July 2023 and charged by the DOJ with securities fraud, commodities fraud, and wire fraud. The SEC and CFTC also filed separate civil enforcement actions against him. His criminal trial proceeded in 2025.
How do I file a claim against Celsius Network in bankruptcy?
The deadline to file proofs of claim in the Celsius bankruptcy has passed. Customers who filed timely claims are participating in the distribution process under the confirmed reorganization plan. Those who missed the deadline should consult a bankruptcy attorney about their options.