Celsius Network CEO Alex Mashinsky Freezes $25 Billion in Customer Withdrawals, Files Bankruptcy Amid Fraud Allegations

Summary

On June 12, 2022, Celsius Network — a crypto lending platform with approximately 1.8 million customers worldwide — abruptly froze all withdrawals, swaps, and transfers, trapping an estimated $25 billion in customer funds. Celsius had invested $935 million of customer deposits into the Terra/LUNA protocol and Anchor Protocol's 20% yield promises. Following Terra's collapse, Celsius was rendered insolvent. CEO Alex Mashinsky had continued to publicly assure customers that Celsius was safe even as the platform faced a liquidity crisis. Celsius filed for bankruptcy in July 2022. Mashinsky was later charged with fraud by the DOJ and SEC, accused of systematically lying to customers about Celsius's financial health. In 2025, Mashinsky was sentenced to 12 years in federal prison. Celsius's collapse became one of the clearest examples of how misrepresentation and regulatory gaps in crypto lending devastated retail investors.