Alex Mashinsky, the former CEO of Celsius Network, has formally surrendered all rights to any assets connected to the failed crypto lending platform as part of the ongoing bankruptcy proceedings. Court documents reveal that Mashinsky and related entities—AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC—are barred from participating in future distributions under Celsius's Chapter 11 bankruptcy plan.
This forfeiture agreement enables the reallocation of funds previously reserved for Mashinsky and affiliated parties to be redirected to affected customers and creditors, potentially improving their recovery rates.
Celsius filed for bankruptcy in July 2022 after halting user withdrawals amid severe market volatility driven by events including the LUNA collapse. Since then, the platform has returned approximately $2.53 billion to users, with about 70% of creditors receiving some repayments. However, over 120,000 creditors still have unclaimed funds, mostly owed under $100.
Mashinsky's downfall culminated in a December guilty plea to fraud-related charges, resulting in a 12-year federal prison sentence for misleading investors and misusing customer funds, including manipulating the value of Celsius's native token (CEL). His removal from recovery rights is viewed positively by remaining creditors since it removes a barrier to maximizing distributions. The bankruptcy court will continue overseeing enforcement of the agreement as the process advances toward closure.