Alex Mashinsky forfeits rights to Celsius assets amid ongoing bankruptcy process

Alex Mashinsky, the former CEO of Celsius, has agreed to surrender all rights to assets tied to the collapsed crypto lender.

According to newly filed court documents, Mashinsky and entities associated with him, including AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC, will be excluded from any future distributions under the Celsius bankruptcy plan.

The filing stated:

“All Claims asserted by, or scheduled by the Debtors on behalf of, (1) Mr. Mashinsky, (2) AMV, (3) Koala1, and (4) Koala3 are withdrawn, disallowed, and shall receive no distribution under the Plan.”

The document also stated that the funds freed from the forfeiture should be redistributed to affected customers and creditors.

This development marks another chapter in Celsius’s ongoing bankruptcy proceedings, which began in mid-2022 following the platform’s abrupt suspension of withdrawals.

So far, Celsius has returned roughly $2.53 billion to users. Approximately 70% of creditors have received some form of repayment, but the process has been lengthy and complex.

Celsius bankruptcy

Celsius halted user withdrawals in June 2022, locking up nearly $4.7 billion in customer funds, amid the market instability driven by LUNA’s collapse in the prior month.

The company was forced to file for Chapter 11 bankruptcy in July 2022, triggering investigations into its financial practices and the conduct of its leadership.

Mashinsky was arrested in 2023 over several fraud-related charges and later pleaded guilty as part of his legal proceedings. Prosecutors claimed that he misled investors about the company’s financial health while offloading personal holdings of Celsius’s native token. They added that his actions gave users false confidence even as the platform was nearing collapse.

Last month, Mashinsky was sentenced to 12 years in prison, avoiding the 20-year term prosecutors had pursued. His defense argued that a longer sentence would amount to life imprisonment for the 59-year-old.

His downfall joins a growing list of disgraced crypto leaders, including FTX’s Sam Bankman-Fried and Terra’s Do Kwon, who were once industry icons whose collapses have reshaped public and regulatory perceptions of digital assets.

The post Alex Mashinsky forfeits rights to Celsius assets amid ongoing bankruptcy process appeared first on CryptoSlate.