Mashinsky cites Gemini case in latest bid to overturn Celsius conviction

Former Celsius Network CEO Alexander Mashinsky is pointing to the SEC's recent handling of the Gemini Earn case in his latest bid to overturn his fraud conviction tied to the crypto lender's collapse. In a newly filed motion to the U.S. District Court for the Southern District of New York, Mashinsky argued that developments around both Celsius creditor recoveries and the SEC's treatment of Gemini undermine the narrative presented at his prosecution.

Mashinsky is seeking permission to supplement an earlier habeas corpus petition as he continues efforts to revisit his conviction and sentence.

One of the filing's central arguments focuses on the scale of creditor recoveries emerging from Celsius bankruptcy proceedings. Mashinsky referenced a recent $500m settlement involving one of Celsius's counterparties, identified in the filing as EFH. He argues the payment materially changes the financial picture surrounding the company's collapse. According to the filing, the additional recovery would bring the total amount expected to be distributed to Celsius creditors to roughly $5.5bn later this year.

Mashinsky further claimed that projected distributions now exceed the total net valid claims outlined during Celsius's Chapter 11 proceedings by at least 20%. He argues the latest developments weaken claims that Celsius customers suffered the kind of permanent losses originally emphasized during the criminal case.

Mashinsky also pointed directly to the SEC's recent decision to drop its case tied to Gemini Earn, a crypto lending product that similarly froze withdrawals during the 2022 market crisis. The filing described Gemini Earn as a program "identical" to Celsius's model, noting that Gemini users also waited years for asset recoveries after withdrawals were halted.

Mashinsky argued that despite those similarities, the comparison forms the basis for a broader selective-enforcement argument embedded throughout the filing. Federal prosecutors would likely counter, however, that the Celsius and Gemini matters were not legally equivalent.

Mashinsky pleaded guilty in 2024 to fraud-related charges connected to allegations that he misled customers about Celsius's financial condition and manipulated narratives surrounding the CEL token. The SEC's case against Gemini Earn, by contrast, primarily centered on allegations involving unregistered securities tied to the lending product itself.

The SEC later agreed to dismiss that case after Gemini Earn users were made whole through the Genesis bankruptcy process. That distinction between alleged fraud and securities-registration violations remains one of the key differences between the two cases — a distinction courts tend to take seriously.

Mashinsky's latest motion does not automatically reopen his conviction or sentence. Post-conviction habeas challenges are typically difficult to win, particularly after guilty pleas. Still, the filing highlights continuing debate within the crypto industry over how regulators and prosecutors handled different firms following the 2022 collapse of several major digital asset lenders and trading platforms.