Celsius Freezes $4.7 Billion in Cryptos Before Bankruptcy

On June 12, 2022, Celsius Network froze all withdrawals, exchanges, and transfers on its platform, affecting hundreds of thousands of customers and locking up approximately $4.7 billion in digital assets. Founded in 2017 by Alex Mashinsky, Celsius promised annual returns of up to 17%, but an independent report revealed that these returns were based on an unsustainable business model, using deposits from new customers to pay old ones, constituting a Ponzi scheme. A month after the freeze, on July 13, 2022, Celsius filed for bankruptcy under Chapter 11, showing a $1.2 billion gap between assets and liabilities, with claims reaching $5.5 billion. A year later, on July 13, 2023, Mashinsky was arrested for market manipulation and fraud. On December 3, 2024, he pleaded guilty and was sentenced to 12 years in prison. Customers continue to seek their funds in court, illustrating the irony of Celsius's promise to unbank its users.

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