Alex Mashinsky is an Israeli-American entrepreneur and the co-founder and former CEO of Celsius Network, a cryptocurrency lending platform that became one of the most visible examples of the risks and excesses of the crypto credit boom. After Celsius collapsed and entered Chapter 11 bankruptcy in 2022, Mashinsky was later convicted of securities and commodities fraud in the United States and sentenced to a lengthy prison term in 2025, making his case a landmark in crypto enforcement.
Overview
Born in October 1965 in what was then the Ukrainian SSR, Mashinsky emigrated to Israel as a child and later to the United States, where he built a career across telecommunications, internet infrastructure, and consumer-facing fintech. Before entering crypto, he founded multiple companies in Voice over IP (VoIP), transportation, and marketplace services. In 2017 he turned to digital assets, pitching Celsius as a “better than a bank” platform that would let users earn high yields on deposits of cryptocurrencies such as Bitcoin and Ethereum. At its peak, Celsius reportedly managed tens of billions of dollars in assets before freezing withdrawals and collapsing during the 2022 market downturn.
Early Career and Telecommunications Ventures
Mashinsky’s early work focused on telecom and networking. In the 1990s he founded companies that explored internet-based voice technology and switching solutions, including VoiceSmart and other ventures designed to route calls over IP networks rather than traditional phone lines. He was also involved with Arbinet, a telecom trading platform that enabled carriers to exchange voice traffic, and later with GroundLink, an on-demand car service booking platform that connected riders with livery and limousine providers via the web and mobile apps.
These ventures positioned Mashinsky as a serial entrepreneur comfortable with regulated industries and network businesses. His experience in telecom and marketplaces informed the rhetoric he later used in crypto, where he framed Celsius as the latest in a series of efforts to “disrupt” legacy intermediaries by using new technology and more user-friendly platforms.
Founding Celsius Network
In 2017, Mashinsky co-founded Celsius Network alongside Daniel Leon and Nuke Goldstein. The company marketed itself as a crypto lending and borrowing platform where users could deposit digital assets and earn high yields, often much higher than rates available in traditional finance. Celsius paid interest in kind or via its native CEL token, and it allowed customers to borrow against their deposits by using crypto as collateral.
Under Mashinsky’s leadership, Celsius promoted slogans such as “unbank yourself” and positioned the platform as a safer, more transparent alternative to banks. He hosted weekly “Ask Mashinsky Anything” streams, where he spoke directly to the community about rates, risk, and the firm’s outlook, often emphasizing that Celsius returned most of its revenue to users. The company grew rapidly, reporting billions of dollars in assets under management and raising large equity rounds that valued it in the billions of dollars by 2021.
Collapse of Celsius and Bankruptcy
In mid-2022, amid a broader crypto market sell-off and the failure of several large counterparties, Celsius encountered severe liquidity stress. In June 2022, the platform abruptly paused all withdrawals, swaps, and transfers, citing “extreme market conditions”. The halt triggered widespread concern among users and contributed to further declines in crypto prices.
On July 13, 2022, Celsius and its affiliated entities filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. Court filings revealed a multibillion-dollar hole in the balance sheet and detailed aggressive trading strategies, extensive rehypothecation of customer assets, and large exposures to volatile tokens and counterparties. Millions of retail users were left with frozen accounts and uncertain recovery prospects.
Over the following years, Celsius advanced a reorganization plan that included the creation of a new bitcoin mining company, Ionic Digital, owned by creditors, and the distribution of crypto and cash to claimants. The company formally exited bankruptcy in early 2024 and began winding down operations, including the shutdown of its mobile and web apps.
Criminal Charges, Guilty Plea, and Sentencing
In July 2023, U.S. authorities charged Mashinsky with multiple counts related to fraud and market manipulation, alleging that he misled customers about Celsius’s financial health and risk profile while secretly taking high-risk bets and selling personal holdings of the CEL token. Regulators also coordinated civil actions against him and other former executives, accusing them of deceptive marketing and misuse of customer funds.
In December 2024, Mashinsky pleaded guilty to securities fraud and commodities fraud, admitting that he had made materially false and misleading statements about Celsius’s business and had participated in schemes to manipulate the price of CEL. In May 2025, a federal judge sentenced him to 12 years in prison and ordered substantial financial penalties and forfeitures, marking one of the harshest sentences to date arising from the 2022 crypto lending collapse.
Role and Legacy in the Digital Asset Ecosystem
Alex Mashinsky’s trajectory encapsulates both the promise and the systemic risks of the centralized crypto lending boom. Under his leadership, Celsius helped popularize yield-bearing crypto accounts and “bank replacement” narratives that attracted millions of users and large institutional capital. At the same time, the platform’s failure, bankruptcy, and the subsequent criminal case highlighted how opaque risk-taking, token price manipulation, and misaligned incentives can undermine customer protections in the absence of strong oversight.
For the broader digital asset industry, Mashinsky’s rise and fall remain a cautionary case study in the dangers of treating complex, leveraged lending businesses as simple savings products. His story continues to shape regulatory discussions around centralized lending platforms, token issuers, and the standards of disclosure and governance expected from firms that custody and deploy customer assets at scale.
