Former Celsius CEO Alex Mashinsky will receive no share of the crypto lender’s bankruptcy estate, following a court-approved agreement that blocks him and affiliated entities from accessing any of the funds recovered during the company’s Chapter 11 proceedings.
According to a motion filed by the U.S. Bankruptcy Court for the Southern District of New York, an agreement was reached between the Celsius debtors and Mashinsky alongside AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC—preventing those parties from receiving any distributions from the Celsius bankruptcy.
The ruling clears the way for the estate to redistribute funds previously frozen due to claims from Mashinsky and related entities. The court emphasized it would retain jurisdiction over any disputes arising from the agreement, but noted that it would not interfere with the ongoing criminal case against Mashinsky.
Mashinsky serving 12-year sentence for fraud
In May 2025, Mashinsky was sentenced to 12 years in prison after being convicted of defrauding Celsius customers. While his legal team had argued for leniency based on his military service and guilty plea, the judge sided with prosecutors, though stopping short of the 20-year sentence originally sought by the Department of Justice.
Mashinsky’s conviction marked a major chapter in the fallout from Celsius’ collapse, which had wiped out billions in customer funds and sent shockwaves through the crypto lending sector.
Celsius creditors begin to recover funds
Meanwhile, Celsius has been steadily returning assets to creditors. Since entering bankruptcy in July 2022, the platform has paid out more than $2.5 billion to over 251,000 creditors, with a further $127 million disbursed from a litigation recovery fund in November 2024.
Not all users filed claims more than 121,000 creditors declined to participate, often due to holdings under $1,000, with most losing less than $100.
The company formally exited Chapter 11 proceedings in July 2023 following two key settlement agreements, enabling structured asset distribution without further legal delays.
