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What was the Celsius bankruptcy?
Celsius was a crypto lender that paid interest on deposits. It froze withdrawals and went bankrupt in 2022. Its founder, Alexander Mashinsky, pleaded guilty to fraud and was sentenced in 2025 to 12 years in prison.
What it means for you
Interest on deposited crypto is paid by lending or investing it, so the deposit carries that risk. In a failure, depositors can rank as unsecured creditors.
How it works
The US Justice Department says Mashinsky misled customers about Celsius's financial condition and manipulated the price of its token, CEL, at times using customer deposits to buy it. He was sentenced to 12 years, with forfeiture of about $48.4 million.
Source: US DOJ (SDNY): Founder of Celsius sentenced to 12 years · checked 5 October 2026
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