Celsius Network

Celsius Network, a centralized crypto lending platform, marketed itself as a "safe" bank alternative offering high yields while — per the CFTC — running a deceptive scheme from 2018 through June 2022, taking in roughly $20 billion in customer funds and deploying them into uncollateralized loans and risky DeFi positions. Celsius paused all withdrawals, swaps, and transfers on June 12, 2022 — when customers still held roughly $4.7 billion in crypto they could not access — and filed for Chapter 11 in the Southern District of New York on July 13, 2022, with about 600,000 accounts affected. The FTC charged that Celsius misappropriated more than $4 billion in consumer deposits.

Founder-CEO Alexander Mashinsky was indicted on seven counts in July 2023 and pleaded guilty on December 3, 2024, to commodities fraud and securities fraud, admitting to misrepresenting Celsius's financial condition and manipulating the price of the CEL token. In May 2025 Judge John G. Koeltl sentenced him to 12 years in prison plus three years of supervised release, a $50,000 fine, and forfeiture of $48,393,446. On May 29, 2026, Mashinsky filed a pro se motion to vacate the sentence (claiming ineffective counsel tied to an FTX-related conflict); no ruling has issued.

On the civil side, the FTC's July 2023 settlement with the corporate entities imposed a $4.7 billion judgment — suspended so remaining assets could be returned through bankruptcy — and by July 2026 the three co-founders had been ordered to pay $16.5 million total (Mashinsky $10M in April 2026; Shlomi Daniel Leon $4.1M and Hanoch "Nuke" Goldstein $2.4M under June 29, 2026 orders) with permanent marketing bans. The CFTC resolved its action on June 18, 2026 with permanent trading and registration bans against Mashinsky; the SEC's parallel civil case against Celsius and Mashinsky (filed July 13, 2023) was stayed pending completion of the criminal proceedings. The bankruptcy plan was confirmed November 9, 2023, and the reorganized estate began distributing over $3 billion in crypto and fiat to creditors. Loss figures vary by source: ~$4.2B in account assets at filing vs. the FTC's $4.72B consumer-harm judgment (used here).

Sources: [DOJ SDNY sentencing release](https://www.justice.gov/usao-sdny/pr/founder-celsius-sentenced-12-years-fraud-and-market-manipulation), [FTC 2023 settlement](https://www.ftc.gov/news-events/news/press-releases/2023/07/ftc-reaches-settlement-crypto-platform-celsius-network-charges-former-executives-duping-consumers), [FTC July 2026 founder orders](https://www.ftc.gov/news-events/news/press-releases/2026/07/founders-celsius-network-ordered-pay-165-million-resolve-ftc-charges), [CFTC consent order June 2026](https://www.cftc.gov/PressRoom/PressReleases/9256-26), [Decrypt on motion to vacate](https://decrypt.co/369520/celsius-founder-mashinsky-files-12-year-crypto-fraud-sentence-vacated)

**Official action:** DOJ: guilty plea Dec 2024, 12-year sentence May 2025; FTC $4.7B suspended judgment 2023 + $16.5M founder orders 2026; CFTC permanent trading/registration bans June 2026