Celsius Token: 'Unbank Yourself' - Then Lose Everything

"The value was fake," Roni Cohen-Pavon, chief revenue officer of the crypto lender Celsius Network, wrote to his boss Alex Mashinsky about the company's own token, CEL. "No one is buying except for us." US prosecutors later quoted the message in their case against both men. Mashinsky, who built Celsius on the slogan "Unbank Yourself", is now serving 12 years in federal prison. The token is worth about a cent.

At its peak on 3 June 2021, CEL traded at $8.02, according to CoinMarketCap, and the company counted it among the reasons customers should trust it with their savings. By 12 May 2022 it was at 57 cents. A month later Celsius froze withdrawals for 1.7 million customers holding about $4.7 billion. A court-appointed examiner later found that from 2020 onwards Celsius spent about $558 million buying its own token on the open market to hold the price up, often with customer money, while its founders sold.

What CEL was

Celsius was a crypto lender. Customers deposited bitcoin, ether or stablecoins (digital tokens designed to stay worth one dollar) and earned interest, sometimes in double figures, far above what any bank paid. Celsius said it earned that money by lending the deposits out safely.

CEL was the glue. It was a token Celsius created and sold in 2018, something like a loyalty card that also traded on the open market like a penny stock. Customers could choose to take their weekly interest in CEL instead of in the coin they had deposited, and if they did, Celsius paid a higher rate. The more of a portfolio a customer held in CEL, the higher their loyalty tier and the bigger the bonus, which for top-tier "Platinum" customers ran to roughly 30% extra. Every one of those bonuses gave customers a reason to buy CEL and not sell it.

The token began smaller than advertised. Celsius told customers it would sell 325 million CEL in private sales and a public token sale, an ICO, to raise $50 million. According to the examiner, Shoba Pillay, a former federal prosecutor appointed by the bankruptcy court, it sold only about 203 million and raised about $32 million.

The flywheel

Mashinsky described Celsius as a "flywheel": more customers meant more deposits, which meant more profits, which Celsius would use to buy CEL, which would push up its price and make everyone's holdings worth more. Pillay's report, filed in January 2023, said it never worked that way. Celsius did not make the profits. It bought CEL anyway, about $558 million worth from 2020, and did not tell customers that its own buying was the main reason the price kept rising. The Block reported the examiner's finding that Celsius had bought every CEL on the market at least once, and in some cases twice.

While the company bought, insiders sold. Pillay found that Mashinsky made at least $68.7 million selling CEL between 2018 and the bankruptcy, and his co-founder Daniel Leon at least $9.7 million. Prosecutors put Mashinsky's proceeds from CEL sales at about $42 million and Cohen-Pavon's at at least $3.6 million. On stock markets this has a plain name: a company secretly buying its own shares to lift the price while its executives sell theirs would be market manipulation, and that is the charge both men later admitted.

The crash

The money Celsius was spending on CEL was money it did not have. When the Terra stablecoin and its LUNA token collapsed in May 2022, prices across crypto fell and Celsius's own risky bets went bad. CEL fell to 57 cents by 12 May, the point at which, in the examiner's account, the "backbone" of Celsius broke. On 12 June 2022 Celsius paused all withdrawals, citing "extreme market conditions". On 13 July it filed for Chapter 11 bankruptcy in New York, the US process that lets a failing company keep operating while a court decides who gets paid.

CEL holders came last in a queue that was already short. On the day of the bankruptcy filing CEL traded at about 80 cents. Holders argued their tokens should be counted at that price. Judge Martin Glenn disagreed. In the repayment plan he approved in November 2023, CEL was valued at 25 cents a token. The company had argued that the market price meant nothing because Celsius had manipulated it, and the judge called 25 cents a fair, perhaps generous, value for a token of a platform that would never operate again.

Court, and what is left

Mashinsky was arrested on 13 July 2023, a year to the day after the bankruptcy. Cohen-Pavon pleaded guilty in September 2023 and agreed to cooperate. On 3 December 2024 Mashinsky pleaded guilty to two counts, commodities fraud and a fraudulent scheme to manipulate the price of CEL. On 8 May 2025 Judge John Koeltl sentenced him to 12 years and ordered him to forfeit more than $48 million. Prosecutors had asked for 20 years; his lawyers had asked for one. On 13 May 2026 Koeltl sentenced Cohen-Pavon to time served and a year of supervised release, crediting his cooperation. He agreed to forfeit more than $1 million and pay a $40,000 fine.

Mashinsky is fighting on. In a handwritten motion filed in May 2026 he asked the court to vacate his sentence, arguing that his lawyers had a conflict of interest and that Sam Bankman-Fried's FTX had manipulated CEL's price to destroy Celsius. No court has accepted those claims. Regulators have meanwhile shut every door: the Federal Trade Commission settled with him in April 2026 for $10 million and an industry ban, the Commodity Futures Trading Commission imposed permanent trading bans in June, and on 9 October 2026 New York Attorney General Letitia James announced a permanent ban from the securities, commodities and crypto industries, with up to $35 million payable if he fails to forfeit a further $10 million or does not serve his full sentence.

Celsius left bankruptcy in January 2024. By August 2026 creditors had received more than $3.4 billion, according to the attorney general's office, including money from a $299.5 million settlement with the stablecoin issuer Tether. Many got back only part of what they put in. CEL still trades on a handful of venues at around one cent, about 99.9% below its peak.