Alex Mashinsky agreed not to claim any money from the Celsius bankruptcy refunds.
- Mashinsky and related firms cannot receive funds from Celsius’ bankruptcy.
- Over $2.5 billion has been paid to Celsius creditors so far.
- Mashinsky was previously sentenced to 12 years in prison for fraud.
Bankruptcy Court Blocks Mashinsky’s Claims
Alex Mashinsky, the former CEO of Celsius, will not get any money from the company’s bankruptcy funds. This decision is part of a deal between Celsius and Mashinsky. It also includes his companies, AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC. The agreement says these parties cannot take part in the distribution of returned funds.
The U.S. Bankruptcy Court for the Southern District of New York approved this decision. It also keeps control over any future disputes tied to this case. However, the court made it clear that it will not interfere with Mashinsky’s ongoing criminal case.
Mashinsky Sentenced to 12 Years
In May 2024, a U.S. judge sentenced Mashinsky to 12 years in prison. He was found guilty of fraud. Mashinsky had pleaded guilty in December 2023. His legal team mentioned his past military service while asking for a lighter sentence. The U.S. government initially wanted a 20-year prison term. His lawyers argued that would be like a “death-in-prison” sentence because of his age.
Celsius Creditors Receive Refunds
Since the company filed for bankruptcy in 2022, Celsius has returned a large portion of funds to its users. In August 2024, Celsius paid back more than $2.5 billion to over 251,000 people. These include users who deposited funds or borrowed through Celsius’ services. But over 121,000 other users did not file claims, mostly because the amounts were under $1,000. Many of them lost less than $100.
In November 2024, Celsius said it would pay out another $127 million from a special recovery account. This money is meant to go to everyday users and customers of the Earn program. These payouts continue after Celsius exited Chapter 11 bankruptcy in July 2023. Chapter 11 allows a company to restructure its debts while still operating.
Source: cointelegraph.com
