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Celsius CEO Alex Mashinsky Has Been Sentenced to 12 Years in Prison for Crypto Scam 

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  • Alex Mashinsky, former CEO of Celsius Network, was sentenced to 12 years in prison after pleading guilty to securities and commodities fraud.
  • Celsius filed for bankruptcy in 2022 after a market crash triggered withdrawals; it was later revealed that the platform had a $1.19 billion deficit, which led to one of the largest FTC settlements in history.


The former CEO of Celsius Network, Alex Mashinsky, has been sentenced to 12 years in prison for his involvement in a multi-billion-dollar crypto. He also admitted to two fraud charges. This conviction follows a lengthy investigation done into the operations of Celsius Network, a once-prominent cryptocurrency lending platform.

Prior to the platform shutting down, Alex was regarded as a leader in the crypto industry, and Celsius was seen as the “bank” for digital assets.

In December, Mashinsky pleaded guilty to securities and commodities fraud. In a Manhattan court. The U.S. District Judge John G. Koeltl handed down the sentence, which many have regarded to be among the harshest given in connection with the 2022 collapse of the crypto market. According to prosecutors, Mashinsky’s actions have been seen as part of a large-scale scheme to deceive investors.

The Collapse of Celsius and the Origin Alex Mashinky Legal Issues


The platform was founded in 2017 and is based in Hoboken, New Jersey. In July 2022, Celsius filed for Chapter 11 bankruptcy after a ton of customer withdrawals followed a drop in crypto prices. Initially, the company promised customers returns as high as 17% on deposits, but during the process of protecting their platform in court, it was discovered that they had fallen short about $1.19 billion. Alex Mashinsky’s legal issues officially began in 2023 when he was arrested on charges involving securities, commodities, and wire fraud. 

Around the same time, Celsius agreed to pay a $4.7 billion settlement with the Federal Trade Commission, one of the largest in its history. That agreement depended on Celsius returning the remaining customer funds through bankruptcy.

But it was later discovered by Rye prosecutors that Mashinsky gave false information about the safety and profits of Celsius’s platform while secretly selling millions of dollars in personal assets. When he was asked, he first claimed innocence; however, his guilty plea and final sentencing brought an end to a long-running case, which also led to charges from the SEC and CFTC. Both agencies accused him and Celsius of carrying out a large-scale crypto fraud. His sentencing shows a significant development in the ongoing efforts to hold crypto executives accountable for fraudulent activities.

More Reading: XRP Price Set To Continue Bleeding As Market Eyes Are Drawn To New PayFi Star

Alex Mashinsky on the Verge of 20-Year Sentence as DOJ Slams Crypto Fraud Mastermind

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  • The Department of Justice has requested a 20-year prison term for Mashinsky, emphasizing that his actions were deliberate and not a result of negligence.
  • Despite pleading guilty, Mashinsky still refuses to take full responsibility for his fraudulent acts, shifting blame to external factors while personally profiting $48 million from the scheme.

The Department of Justice (DOJ) has requested that the founder of Celsius, Alex Mashinsky, serve a 20-year prison sentence because they believe that his actions didn’t come as a result of negligence or market misfortune but rather a series of calculated and deliberate decisions to lie. Their decision underscored the gravity of his offenses and the damage he inflicted on investors.

One of the co-founders of the collapsed crypto platform, Alex Mashinsky, could spend 20 years in prison if the U.S. Department of Justice gets its way. In a memo filed on the 28th of April, the DOJ asked the court to give him a strong sentence for his role in the platform’s fraud.

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Alex Mashinsky on the Verge of 20-Year Sentence as DOJ Slams Crypto Fraud Mastermind 2

According to them, his actions were not a mistake but instead a purposeful act to scam users. This mistake caused around $7 billion in damage and hurt thousands of people. After Celsius froze withdrawals in June 2022, users lost access to about $4.7 billion in combined crypto assets. The DOJ described Mashinsky’s behavior as a long-running scheme driven by greed and deception.

Mashinsky’s Guilty Plea and Refusal to Take Responsibility

Mashinsky, who admitted guilt in December 2024, misled users about the security of their money and secretly manipulated the CEL token to make a profit.

Despite confessing to the court, he still avoids taking complete responsibility for his actions but instead points fingers at outside forces, including officials, the market, and even the people he stole from. Prosecutors said his actions were not mistakes or poor judgment but clear plans to cheat and steal for personal gain.

He made at least $48 million for himself after causing over $500 million in damage. When the company was still in operation, it claimed to have managed $20 billion in crypto, but behind the scenes, it took big risks, used customer funds to pump token prices, and gave ‘hodl-ers’ false promises.

Although he told investors he was holding CEL tokens, he had actually sold the tokens for millions at its peak. The DOJ wants Mashinsky’s punishment to match the damage done and warn others in the crypto world.

Read More: Galaxy Digital Moves 23,900 ETH to Coinbase, Market Braces for Impact

Celsius Fights Back: Appeals Court’s $444M Ruling in Heated FTX Battle

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Celsius has filed an appeal against a court ruling that denied its $444 million claim in the FTX bankruptcy case. The defunct crypto lender disputes the decision, which dismissed its damages claims and preferential transfer allegations. The appeal adds another layer to the two firms’ ongoing bankruptcy battle.

Court Ruling Dismisses Celsius’s Claims

In December, a U.S. judge dismissed Celsius’s claims for damages and preferential transfers against FTX. The court found that Celsius’s initial filing lacked sufficient detail to support the preferential transfer claim. Furthermore, the judge ruled that Celsius’s attempt to amend its claims in July 2024 was procedurally improper.

Celsius’s revised claims faced rejection because they were untimely and disrupted FTX’s reorganization process. The court also noted that Celsius provided no valid justification for the delayed filing. These rulings significantly weakened Celsius’s efforts to recover the contested funds.

Celsius has made substantial payouts to creditors as part of its bankruptcy resolution efforts. By August, the company distributed over $2.53 billion to 251,000 creditors, covering 93% of the total claim value. In November, Celsius announced an additional $127 million payout, addressing 60% of outstanding claims.

These payments aimed to restore confidence among creditors despite the firm’s ongoing legal battles. However, the company’s bankruptcy challenges persist, with the appeal against FTX adding complexity to its financial recovery.

Mashinsky Guilty Plea Clouds Celsius Recovery Plan

Celsius founder Alex Mashinsky pleaded guilty in December to fraud and market manipulation charges related to the Celsius token. He faces a maximum 20-year sentence, with sentencing scheduled for April 2025. The charges have cast a shadow over the company’s recovery efforts.

Mashinsky’s legal troubles, coupled with the firm’s appeal against FTX, highlight the extent of Celsius’s struggles. The appeal’s outcome will likely influence the broader trajectory of Celsius’s bankruptcy resolution.

Bitcoin Hits $50K Amid Crypto Market Turmoil: Analysts Predict $84.5K Target

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Bitcoin is in the spotlight, breaking the $50,000 barrier not seen since December ’21. That’s broken through amid turbulent times while the digital currency faces volatility and a number of challenges. The characteristic volatile fluctuations of the cryptocurrency market witnessed a series of events. Besides, Luna has sharply crashed, and FTX went bankrupt. Moreover, Blockfi and Celsius have collapsed, thus causing questions as to the inviolability of BTC and the rest of the cryptocurrency ecosystem.

Despite hurdles, Bitcoin has been able to express remarkable resilience, thereby bolstering the notion that it is not a passing fad but an extremely powerful entity within the world of finance. The future seems to open much brighter for Bitcoin and, most importantly, for the whole market of cryptocurrencies, signifying endurance and future growth.

Crypto analyst Ali Martinez highlighted that this was the cycle of emotions that long-term Bitcoin holders usually go through while remaining bullish. He further explained that this cycle usually began with capitulation before the short time marked by corresponding price corrections, passing through hope, optimism, and belief. Subsequently, the market re-enters a phase of belief, signaling potential further gains ahead.

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At this time, it certainly looks as though the market has gone through another anxiety period and into a fresh phase of belief. That means further room to the upside is indicated for Bitcoin before hitting the peak of euphoria that would accompany the top of any bull cycle.

Bitcoin Soars: Analyst Predicts $84,500 Target Price

As of now, the price of Bitcoin stands at $50,023, with a 24-hour trading volume of $42.31 billion and a market capitalization of $981.79 billion. Over the past 24 hours, Bitcoin has seen a 3.66% increase in price, with a 17% gain in the weekly chart.

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Source: CoinMarketcap

Moreover, further insights by the crypto analyst, CryptoCon, have been shared through an X post, highlighting the continuous relevance of Bitcoin Magic Bands. These bands have shown to be the right indicators for price movement in the past, and new data has indicated that the price is in a surge towards Blue Level 2 after recently breaking Yellow Level 1.

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Unlike other mid-tops, which usually result in corrections at lower primary levels, Bitcoin is now retesting Level 2 at $49,600. In alignment with the chart analysis of CryptoCon, a strong break above a key level normally opens the way for a move towards the next level, in this case, which, stands at level 3, hanging overhead at $84,500.

However, the fact that Bitcoin could move up further only underscores the dynamic, ever-changing nature of the cryptocurrency market, with investors and analysts waiting to see how events play out through the upcoming weeks and months.

Celsius Exit from Bankruptcy After 18-Month Battle

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A new beginning awaits stablecoin issuer Celsius Network LLC as it officially exits bankruptcy, marking the culmination of an intense restructuring process. The crypto firm, which concluded its financial reorganization on January 31, 2024, disclosed this information in a press release. The achievement follows the implementation of the confirmed plan of reorganization [“Plan”], a strategy that garnered approval from an overwhelming 98% of the firm’s account holders. The Bankruptcy Court for the Southern District of New York, known as the “Bankruptcy Court,” officially confirmed the plan on November 9, 2023.

Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors.

Celsius Network portrayed this milestone as the culmination of a grueling eighteen-month journey. The crypto firm emphasized its success in building consensus among diverse stakeholders, resolving intricate legal matters, cooperating fully with regulatory investigations, and executing the transactions outlined in the plan.

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Celsius Exit from Bankruptcy After 18-Month Battle 7

The reorganization plan encompasses the distribution of over $3 billion in cryptocurrency and fiat to Celsius’ creditors. Additionally, a new Bitcoin mining entity, Ionic Digital, Inc., has been established as part of the restructuring. This new venture will be owned by Celsius’ creditors and will have its mining operations managed by Hut 8 Corp.

Celsius: Overcoming Regulator Roadblocks

The crypto lender faced considerable challenges post-bankruptcy as it fought to salvage its bitcoin mining and crypto lending operations. A crucial turning point came in December 2023, when a U.S. court approved the crypto firm to establish the aforementioned Bitcoin mining company, a move sanctioned by U.S. bankruptcy judge Martin Glenn. This decision allowed the debtors to initiate liquid cryptocurrency distributions on the effective date.

At that time, the Official Committee of Unsecured Creditors representing Celsius Networks expressed confidence in the bankruptcy process’s trajectory, affirming, “We believe the debtors remain on track for the effective date to occur at the end of January.”

Celsius overcame obstacles from creditors and regulators before the December ruling paved the way for the crypto lending platform’s emergence from bankruptcy in early 2024. As per the latest P.R., the firm will now pursue an orderly wind-down [OWD] of its operations, including discontinuing the Celsius mobile and web applications.

Celsius To Launch MiningCo: Orderly Wind Down Approved

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A U.S. bankruptcy judge, Martin Glenn, has approved Celsius Network to establish a new Bitcoin mining company owned by creditors. The decision stems from the Orderly Wind Down / MiningCo transaction, as sanctioned by the Court and detailed in an opinion and order issued by Judge Glenn. The ruling permits the debtors to initiate liquid cryptocurrency distributions on the effective date.

The complete opinion can be accessed here: Link to Opinion.

The Official Committee of Unsecured Creditors representing Celsius Networks expressed confidence in the trajectory of the bankruptcy process, stating, “We believe the debtors remain on track for the effective date to occur at the end of January.” Simon Dixon, founder of Bank of the Future, shared his optimism, saying,

Happy Holidays, Celsius Creditors. After a year and a half, the OWD plan has been approved with no revote. In January 2024, we should have an effective date before Bitcoin passes $54k, locking in the upside of all assets for creditors. Judge Glenn ruled.

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Celsius To Launch MiningCo: Orderly Wind Down Approved 9

As Celsius transitions into ‘MiningCo,’ an imminent rebranding announcement is anticipated.

The Manhattan-based court’s decision allows Celsius to deviate from a previously approved bankruptcy plan, justified by the assurance that creditors and customers would not be at a disadvantage under the new restructuring. Judge Glenn emphasized that the flexibility inherent in the plan approved in November enabled Celsius to pivot to an alternate strategy after encountering challenges with the U.S. Securities and Exchange Commission.

The collapse of one of the leading crypto firms was attributed to problematic decisions and the then-prevailing market conditions. To recall, Celsius’ precarious condition was exacerbated by LUNA’s fiasco coupled with an overleveraging issue and the poorly executed WBTC and ETH/stETH positions that led to a total lockdown of their platform.

The crypto firm made headlines again after kicking off an auction on April 22, as it looked for a buyer to save its bitcoin mining and crypto lending operations from bankruptcy.

Celsius Eyes Early 2024 Exit From Bankruptcy

The subsequent reorientation after SEC’s rejection also led Celsius to sever ties with external bidders initially selected to manage the new company. Consequently, mining company US Bitcoin Corp., founded by Hut 8’s Asher Genoot, assumed a central role in overseeing the newly established creditor-owned mining business.

Despite objections from some creditors and the U.S. Department of Justice’s bankruptcy watchdog, who argued for a new vote, Judge Glenn ultimately approved the change without requiring additional creditor approval. The crypto lending platform expects to emerge from bankruptcy in early 2024.

Celsius Bankruptcy Plan Faces Skepticism, Regulatory Hurdles

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Celsius Network LLC, the failed crypto lender, won bankruptcy court approval on Thursday to transform into a creditor-owned Bitcoin mining firm. The plan, which has been met with skepticism from some customers and faces regulatory hurdles, would see Celsius repay customers through a combination of cryptoassets and stock in the new, publicly listed Bitcoin mining company.

US Bankruptcy Judge Martin Glenn said he would confirm the firm’s plan to repay customers, which could start early next year. The ruling is a major milestone for the firm, which went bankrupt last year amid a downturn in digital assets but won enough creditor support for a path through Chapter 11 despite fraud allegations against former executives.

Federal prosecutors have accused former Celsius CEO Alex Mashinsky of manipulating the firm’s native CEL token and making misleading statements to get customers to invest their assets on the platform. Mashinsky has pleaded not guilty.

The firm’s transformation into a crypto miner has raised concerns among some customers, who argue that the plan is too risky and that they will not be adequately compensated for their losses. The company has said that the plan is the best way to repay customers and that it is committed to making them whole.

The plan still faces regulatory hurdles, including approval from the US Securities and Exchange Commission. The firm has said that it could pivot to a liquidation if the crypto mining proposal falls through.

Judge Glenn has urged the SEC to move quickly in deciding whether or not to approve the crypto lender’s plan. He has said that the company’s customers have been waiting too long to get their money back.

Key takeaways:

  • The Network has won bankruptcy court approval to transform into a creditor-owned Bitcoin mining firm.
  • The plan would see Celsius repay customers through a combination of cryptoassets and stock in the new mining company.
  • The plan has been met with skepticism from some customers and faces regulatory hurdles.
  • Celsius says that the plan is the best way to repay customers and that it is committed to making them whole.

Why Celsius is transforming into a Bitcoin mining firm

Celsius is transforming into a Bitcoin mining firm because it believes that this is the best way to repay its customers and generate revenue. Bitcoin mining is a process of verifying transactions on the Bitcoin blockchain and earning rewards in the form of Bitcoin. Celsius believes that the value of Bitcoin will continue to increase over time, which will make mining more profitable.

Celsius customers will receive a combination of cryptoassets and stock in the new Bitcoin mining company as part of the repayment plan. The exact amount of cryptoassets and stock that each customer receives will depend on their individual circumstances.

Celsius has said that it could start distributing assets to customers early next year. However, this will depend on a number of factors, including regulatory approval and the market conditions.

Celsius’ plan to transform into a Bitcoin mining firm is not without risks. The Bitcoin mining industry is highly competitive and the profitability of mining can fluctuate depending on the price of Bitcoin and the difficulty of the Bitcoin network. Celsius also faces regulatory hurdles, including approval from the SEC.

Overall, Celsius’ bankruptcy court approval is a major milestone for the company and its customers. However, there are still a number of challenges that Celsius must overcome before it can repay its customers and emerge from bankruptcy.

Celsius’s Alex Mashinsky vs. FTC Legal Battle Heats Up

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In a recent court filing on Monday, former CEO of Celsius Alex Mashinsky filed a request that the Federal Trade Commission [FTC] drop its ongoing case against him. The crypto lending platform filed for bankruptcy amid the market downturn, and Mashinsky was subsequently arrested in July, facing charges related to fraud and the alleged manipulation of the CEL token’s price.

So far, the top exec has maintained his innocence, deeming the charges groundless. Now, his lawyers argue that the FTC should dismiss claims that he misled investors. Mashinsky’s legal team contends that the allegations do not support the assertion that he deliberately made false statements to obtain customer information from a financial institution, a requirement under the Gramm-Leach-Bliley Act of 1999.

Joining Mashinsky in his defense is his former Chief Technology Officer, Hanoch “Nuke” Goldstein, who asserted that the FTC should establish more specific rules before pursuing novel cases like marketing fraud. Goldstein believes that he is unfairly implicated due to his association with other Celsius executives, citing a retweet of a Celsius blog as the basis for his involvement in the case.

Celsius’ Mounting Legal Trouble

Meanwhile, U.S. Attorney Damian Williams has requested that the court temporarily halt FTC proceedings to prevent potential prejudice to the parallel criminal case. Mashinsky, who resigned as CEO in September 2022 following Celsius’s bankruptcy filing, remains released on a $40 million bond, with his banking and real estate assets recently frozen by court order.

Earlier, the Commodity Futures Trading Commission [CFTC] accused Celsius of defrauding investors out of billions of dollars. The SEC also alleged that Celsius’ token CEL and its erstwhile Earn Interest Program are securities, adding to the agency’s recent stance in other filings that a number of cryptocurrencies like BNB, BUSD, SOL, ADA, and MATIC are securities. This adds another layer of complexity to the ongoing legal saga surrounding the embattled crypto loan platform.

In May, a consortium called Fahrenheit declared that it had acquired Celsius’ assets. The group’s plan is to distribute the platform’s liquid assets to account holders. Illiquid assets, such as its institutional loan portfolio, mining business, and alternative investments, will be managed by a new management team.

Bitcoin Bulls & Bumps, 10 Public Companies Ride The Rollercoaster: CoinGecko Report

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In a recent research report released by CoinGecko, the landscape of publicly traded companies with substantial Bitcoin holdings has been examined, shedding light on the complex dynamics of their investment strategies and the fluctuating fortunes of the cryptocurrency market.

The study e­xplores the timeline­ of Bitcoin’s remarkable ascent and subse­quent setback. It highlights the historic bull marke­t in 2021, propelling BTC’s price to an unprece­dented peak of $69,044.77. During this pe­riod, numerous public companies significantly increase­d their exposure to BTC, capitalizing on institutional inte­rest and El Salvador’s acceptance of BTC as a le­gal tender.

The subse­quent 18 months brought about a significant shift in events for major industry playe­rs like Voyager, Celsius, and FTX. The­ir fortunes took a sharp downturn, resulting in BTC expe­riencing a staggering 77.4% decre­ase from its peak price. Finally, on Nove­mber 9, 2022, BTC hit a low point of $15,602.

Evolving Bitcoin Portfolios: Expansion & Maintenance

The study focuse­s on analyzing the performance of the­ top 10 publicly traded companies and their Bitcoin portfolios. It e­xamines how these companie­s are faring based on their approximate­d entry prices, compared to the­ “current value” of Bitcoin, which was calculated using the­ average daily price in July 2023 ($30,090). This valuation se­rves as a benchmark for assessme­nt.

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MicroStrategy, led by Michael Saylor, emerges as the leader in Bitcoin holdings, with 152,333 BTC and an impressive 11.07% unrealized return on investment (ROI), translating to a staggering profit of $456,712,092. 

The other companies in the top 10 exhibit varying degrees of unrealized profits, ranging from 9.79% (Block Inc) to an astonishing 106.3% (Marathon Digital Holdings). Notably, NEXON Co. and Tesla are experiencing unrealized losses of -48.32% and -5.97%, respectively.

Interestingly, the mining companies – Hut 8 Mining Corp., Riot Platforms, Inc., and Hive Blockchain – benefit from their unique entry price structure, accounting for factors such as mining expenses. In contrast, Marathon Digital Holdings, which significantly increased its holdings by 28.94%, stands out with an unrealized profit of 106.3%.

The report also highlights the evolution of Bitcoin holdings within this group of companies. While some firms, like MicroStrategy and Coinbase Global, Inc., have expanded their Bitcoin portfolios, others, including Block and NEXON Co., have maintained their holdings. Tesla’s journey stands out: after a significant purchase, they sold off 75% of their Bitcoin holdings due to environmental concerns and asset rebalancing.

Incorporating new e­ntrants, Galaxy Digital Holdings, Tesla, and Riot Platforms have now achieve­d a coveted position in the top 10 rankings. This highlights the­ ever-evolving nature­ of Bitcoin investment.

The re­port concludes by emphasizing the significance­ of making consistent investments and analyzing past purchasing tre­nds to comprehend the comple­xities of the Bitcoin market. It urge­s companies to remain vigilant in this eve­r-changing sphere.

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Bankrupt Celsius Begins Liquidating Altcoins for BTC and ETH

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Celsius, the crypto lending company that has declared bankruptcy, has initiated the process of selling its altcoin assets and converting them into Bitcoin (BTC) and Ethereum (ETH), as per the approval of a U.S. judge overseeing the bankruptcy proceedings. The company transferred these assets to FalconX, which then facilitated their transfer to Binance. In addition, Celsius made a deposit of 186,149 BONE tokens valued at $235,000 into OKEx.

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Source

According to Lookonchain, an analytics firm specializing in blockchain, Celsius has started selling its altcoin assets. The company has successfully sold various tokens, including 1.27 million LINK tokens worth $8.5 million, 2.83 million SNX tokens valued at $7.84 million, 12,597 BNB tokens worth $3 million, 4.45 million 1INCH tokens amounting to $2.26 million, 8.53 million ZRX tokens worth $1.9 million, and 439,000 FTT tokens valued at $713,000.

Arrest of Celsius’s Former CEO Complicates Bankruptcy Situation

On July 6, Lookonchain highlighted that Celsius seemed to be initiating the exchange of altcoins for Bitcoin (BTC) and Ethereum (ETH). The majority of the altcoins were transferred to a specific wallet address, “0x4131”. Furthermore, the exchange transferred 1,393 StaFi tokens (rETH) to Wintermute Trading and received an equivalent amount of 1,393 ETH in return.

Celsius had a significant holding of altcoins on the Ethereum Virtual Machine (EVM) chain, valued at approximately $164.5 million. Out of this amount, nearly $25 million worth of coins have been sold as of today.

The largest altcoin holding of Celsius, Chainlink (LINK), could potentially face considerable selling pressure, given that other altcoins are being sold. At present, LINK is trading at $6.68, reflecting a decline of over 2%.

Celsius filed for bankruptcy protection in July 2022 due to a shortfall in customer funds, resulting in temporary withdrawal suspensions. It was reported that the company received authorization from the U.S. judge to liquidate its altcoin holdings, which were valued at around $170 million, into BTC and ETH starting from July 1.

However, this development comes at a time when Celsius’s former CEO, Alex Mashinsky, was recently arrested by the Department of Justice (DOJ). According to reports, Mashinsky faces multiple charges, including securities fraud, commodities fraud, and wire fraud, adding further complexity to the company’s situation.