Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at how the Celsius payout will not see anything go to Alex Mashinsky.
Mashinsky Denied Celsius Bankruptcy Payout
Chief United States Bankruptcy Judge Martin Glenn has ruled that Alex Mashinsky is denied from any claims towards the bankruptcy proceeds from the defunct crypto lending platform Celsius. The court order, which was entered on June 16, formally disallows all claims submitted by Mashinsky, the former CEO of Celsius, along with the associated entities AM Ventures Holdings, Koala1 LLC, and Koala3 LLC . The funds will therefore be freed for legitimate creditors, and included in these funds will be reserved cash, liquid cryptocurrency, and MiningCo shares for distribution to legitimate creditors under the Chapter 11 reorganisation plan.
The stipulation agreement was reached on May 20, 2025, between Celsius litigation administrator Mohsin Meghji and Mashinsky. The creditors have already received over $2.5 billion in distributions throughout 2024. The Celsius Network was founded in 2017 and positioned itself as a revolutionary alternative to traditional banking. Customers were promised that they could “unbank yourself” while earning double-digit yields on their cryptocurrency deposits.
The promotion of Celsius had attracted billions in customer funds under the misinformation of these assets being lent to institutional borrowers, generating returns far exceeding anything traditional financial institutions could offer. In mid 2022 the facade came down as the wider crypto market began to enter a major downturn after a number of high-profile failures shook investor confidence.
Customers of Celsius began requesting withdrawals in high volumes, creating a classic bank run scenario that exposed the platform’s fundamental insolvency. On the 12th of June all customer withdrawals were frozen and the company filed for Chapter 11 bankruptcy protection, revealing a massive $1.19 billion hole in its balance sheet a number.
Mashinsky’s deception was revealed and showed he had knowingly misled customers about Celsius’s financial health while directing employees to use new customer deposits to pay promised yields to existing users in a Ponzi-like scheme. Prosecutors proved that Mashinsky had been secretly selling his personal CEL token holdings while publicly claiming he wasn’t selling.
Have a great day.
Peace. CryptoGod-1.
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