Former Celsius CEO Alex Mashinsky has agreed to forgo any claims to assets from the company’s bankruptcy proceedings.
According to a motion filed Monday in the U.S. Bankruptcy Court for the Southern District of New York, an agreement has been reached between the Celsius debtors and Mashinsky, along with AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC, barring any distribution of bankruptcy proceeds to these parties.
The agreement allows Celsius debtors to distribute funds that were previously frozen due to claims by Alex Mashinsky and the three affiliated entities.
While the court has retained jurisdiction over all matters related to the case, it will not interfere with the ongoing criminal proceedings.
“The Court shall have exclusive jurisdiction to resolve any and all disputes related to this Stipulation and Order,” the motion stated.
Alex Mashinsky’s Jail Term
In May, former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison after being found guilty of fraud by a U.S. judge.
Mashinsky’s legal team argued for leniency, citing his military service and his December guilty plea as mitigating factors.
Before the sentencing, the U.S. Department of Justice had pushed for a 20-year prison term. However, Mashinsky’s attorneys opposed the request, calling it a “death-in-prison sentence.”
Celsius Creditors Recover Their Funds
Celsius creditors have collectively claimed over $1 billion in assets so far this year.
In August 2024, the company distributed more than $2.5 billion to over 251,000 creditors. However, around 121,000 eligible creditors did not file claims, largely because their individual losses were under $1,000—with most losing less than $100.
Later, in November 2024, Celsius announced it would distribute an additional $127 million from its “Litigation Recovery Account.” This payout was aimed at retail borrowers, depositors, and users of its Earn program.
Celsius began its Chapter 11 bankruptcy process in July 2022. By July 2023, the company had reached two settlements allowing it to move forward with exiting bankruptcy.
Chapter 11 is a U.S. legal mechanism that enables companies to restructure financially while shielding them from immediate creditor action.
