Celsius Network Freezes Withdrawals and Files Bankruptcy, Locking $4.7 Billion in Customer Funds
Incident Details
Summary
On June 12, 2022, Celsius Network — a crypto lending platform with 1.7 million customers and $11.8 billion in assets — suddenly froze all withdrawals, swaps, and transfers. CEO Alex Mashinsky had promoted Celsius as safer than a bank, paying up to 18% annual yield on crypto deposits. The platform had suffered severe losses in the Terra/Luna collapse and from undisclosed risky lending practices. Celsius filed for Chapter 11 bankruptcy on July 13, 2022, revealing a $1.2 billion hole in its balance sheet. Customer funds were locked for over a year. In July 2023, Mashinsky was arrested on federal fraud, securities, and commodity manipulation charges. Customers eventually recovered a portion of assets through bankruptcy proceedings, but many lost significant savings.
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