Mashinsky: 'Your Funds Are Safe'

He said this on a weekly livestream. Then froze all withdrawals. Then got 12 years.

Alex Mashinsky, Celsius CEO

Alex Mashinsky hosted weekly "Ask Mashinsky Anything" livestreams on YouTube where he personally assured Celsius depositors their funds were safe. He did this consistently for over two years. His folksy demeanor and willingness to answer questions made him seem trustworthy. He wore Celsius t-shirts. He joked with the audience. He called banks the real enemy.

On June 12, 2022, Celsius froze all withdrawals. The $4.7 billion in customer deposits was locked. Mashinsky had been saying "your funds are safe" right up until the moment they were not.

The bankruptcy filing revealed a horror show. Celsius had been gambling customer deposits in risky DeFi protocols, losing hundreds of millions on bad bets. Staked ETH was locked and couldn't be withdrawn. Counterparties defaulted. The math never worked - Celsius was paying 18% yields by taking on enormous risk, and when the music stopped, customers paid the price.

Worse still, Mashinsky had personally withdrawn $10 million from Celsius before the freeze. He was selling CEL tokens while telling customers to buy them. The weekly AMAs were not transparency. They were theater designed to prevent a bank run while insiders exited.

Mashinsky was arrested in July 2023. In December 2024, he pleaded guilty to fraud. The judge sentenced him to 12 years in federal prison, specifically citing his public assurances as an aggravating factor. The court noted that Mashinsky used his personal credibility as a weapon - he kept customers from withdrawing by making them believe he was being honest when he was lying to their faces every single week.

Celsius eventually emerged from bankruptcy. Some creditors got partial repayments. Many got nothing. The CEL token is worthless.