Alex Mashinsky
Celsius Network Founder Who Pleaded Guilty to Fraud
Alex Mashinsky co-founded Celsius Network, a cryptocurrency lending platform that attracted hundreds of thousands of customers by offering high yields on crypto deposits — significantly above what traditional financial institutions offered. Mashinsky positioned Celsius as an alternative to conventional banking, frequently hosting weekly livestreams in which he answered customer questions and argued that banks were exploiting depositors while Celsius shared returns fairly. The platform grew to hold billions of dollars in customer assets.
In July 2022, Celsius froze all customer withdrawals without warning, trapping approximately 4.7 billion dollars on the platform. The company filed for bankruptcy shortly after. A bankruptcy examiner's report subsequently revealed that Celsius had suffered substantial losses from risky decentralized finance investments and poorly managed trading strategies, and that these losses had been concealed from depositors. The report also alleged that Mashinsky had directed the use of company funds to purchase Celsius's own CEL token on the open market to artificially support its price, while he personally sold over forty million dollars in CEL holdings.
The Department of Justice charged Mashinsky with securities fraud, commodities fraud, and wire fraud in July 2023. The SEC and CFTC filed parallel civil actions. In December 2024, Mashinsky pleaded guilty to commodities fraud and securities manipulation charges, admitting in court that he had manipulated the CEL token price and misled customers about the safety and management of their funds. The plea meant he acknowledged deceiving depositors who had continued placing their trust in him through his weekly public communications.
Customers who had deposited funds based on Mashinsky's public assurances that their assets were safe and conservatively managed lost access to their savings. Many were eventually repaid partially through bankruptcy proceedings, though the timing and amounts varied significantly. The Celsius collapse became one of several high-profile crypto failures in 2022 that drew increased regulatory attention to the industry.