Celsius Network Collapse — July 2022
The largest centralised crypto lender suspended withdrawals on 12 June 2022 and filed for Chapter 11 a month later, owing approximately $4.7 billion to retail depositors.
Celsius Network, founded in 2017 by Alex Mashinsky, marketed itself as a bank-replacement for crypto holders, advertising APYs of up to 17% on stablecoin deposits and weekly "rewards days" to its retail userbase. At peak it claimed $25 billion in assets under management and 1.7 million users.
The yield was sustained through a combination of crypto lending and aggressive DeFi farming. As markets declined through 2022 and as the Anchor Protocol collapse drained UST liquidity, Celsius's farming positions deteriorated. On 12 June the firm suspended all withdrawals.
The Chapter 11 filing on 13 July revealed a $1.2 billion balance-sheet hole. Court-appointed examiner Shoba Pillay later produced a 689-page report documenting commingled funds, inadequate risk controls, and statements from senior leadership the examiner characterised as fraudulent.
Mashinsky was arrested in July 2023 and convicted on counts of commodities and securities fraud in November 2024. He was sentenced in May 2025 to 12 years in federal prison.
Timeline
- Celsius suspends withdrawals, swaps and transfers
Citing "extreme market conditions" in a blog post. CEL token drops 50% within an hour.
- Chapter 11 filing in Southern District of New York
Liabilities listed at $5.5B against $4.3B in assets. Approximately 600,000 retail customers affected.
- Examiner report filed by Shoba Pillay
689-page report finds commingled funds, statements characterised as fraudulent, and a balance sheet hole that pre-dated the public collapse.
- Mashinsky arrested by SDNY prosecutors
Charged with securities fraud, commodities fraud and wire fraud.
- Reorganisation plan confirmed
Court approves a plan distributing in-kind crypto plus equity in a new "NewCo" entity to creditors.
- Mashinsky convicted on securities and commodities fraud
Manhattan federal jury convicts after a five-week trial.
- Mashinsky sentenced to 12 years federal prison
Judge John Koeltl imposes a 12-year sentence and orders $48M in forfeiture.
- Alex Mashinsky files motion to vacate his 12-year sentence
The former Celsius CEO filed a motion in the Southern District of New York seeking to vacate the 144-month sentence Judge John Koeltl imposed in May 2025. Mashinsky argued he had ineffective counsel and claimed evidence was tainted, filing the paperwork pro se after his lawyers stopped communicating with him.
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Who was involved
- Alex Mashinskypersonattacker
- Celsius Networkexchangevictim
Legal record
- Examiner
- Shoba Pillay (Jenner & Block)
- Lead Court
- Southern District of New York Bankruptcy Court
- Plan Confirmed
- 2023-11-09
- Chapter 11 Filed
- 2022-07-13
- Mashinsky Verdict
- 2024-11-07
- Mashinsky Arrested
- 2023-07-13
- Mashinsky Sentence
- 12 years federal prison + $48M forfeiture
- Mashinsky Sentence Date
- 2025-05-08
Structural failures identified
Related records
Sources
- Celsius bankruptcy docket, Stretto — All filings and creditor materials
- Mashinsky sentencing release, US Department of Justice — Sentence and forfeiture