Former Celsius CEO Alex Mashinsky has officially relinquished any rights to claim assets from the ongoing Celsius bankruptcy proceedings, according to a court filing made on June 16.
The agreement, submitted to the U.S. Bankruptcy Court for the Southern District of New York, outlines that Mashinsky, alongside AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC, will not receive any distributions from the bankrupt crypto lender’s estate. This move effectively clears the way for Celsius debtors to redistribute funds that had been previously locked due to Mashinsky’s claims.
the motion stated. However, it clarified that this jurisdiction does not interfere with Mashinsky’s ongoing criminal case.
This legal development follows Mashinsky’s conviction in May 2025, where he was sentenced to 12 years in prison on charges of fraud. Despite his legal team urging the court for leniency—citing his military service and his guilty plea in December 2024—the U.S. Department of Justice had initially pushed for a 20-year sentence, which Mashinsky’s lawyers criticized as overly harsh.
The Celsius bankruptcy has been one of the most high-profile collapses in the crypto space. Since the start of 2025, creditors have lodged claims exceeding $1 billion. Last August, the company disbursed more than $2.5 billion to over 251,000 claimants. Still, approximately 121,000 potential creditors did not file claims, most of them due to their balances being under $1,000—many of whom had lost less than $100.
In a bid to provide further restitution, Celsius announced in November 2024 that it would distribute $127 million from its Litigation Recovery Account. This payout targeted retail borrowers, Earn users, and other retail creditors.
The firm had entered Chapter 11 bankruptcy protection in July 2022, seeking to restructure without immediate creditor enforcement. By July 2023, Celsius reached two settlements enabling it to exit the bankruptcy process and begin compensating users impacted by the platform’s collapse.
Mashinsky’s decision to drop his claims could now accelerate the final distribution of remaining funds and help bring closure to a case that has spanned nearly three years.
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