Former Celsius founder and former chief executive Alex Mashinsky has moved to vacate his 12-year prison sentence in a New York federal court, arguing that he received ineffective counsel and that the conviction rests on tainted evidence. The motion, filed in the Southern District of New York, follows Judge John Koeltl’s May 2025 ruling imposing a 144-month term for commodities fraud and securities fraud tied to the Celsius network’s downfall. Mashinsky filed the paperwork without new representation, after announcing on May 5 that he would proceed pro se.

In his filing, Mashinsky contends that his defense was compromised by ineffective assistance of counsel and that the evidence underpinning his guilty pleas was tainted by a “fruit of the poisonous tree” scenario—a legal doctrine referring to evidence obtained through misconduct. He also noted that his counsel ceased communication with him at a critical juncture, forcing him to submit his reply directly to the court without new guidance.

Beyond the legal procedural questions, Mashinsky’s motion reiterates claims about the broader forces he believes influenced Celsius’s fate. He asserts that former FTX chief executive Sam Bankman-Fried intended to destroy Celsius and that the market manipulation surrounding Celsius’s CEL token on the FTX exchange was a central factor in the crisis. In support of his position, Mashinsky attached messages with Celsius’s former chief revenue officer, Roni Cohen-Pavon, alleging a “hostile takeover” attempt at the platform.

Cel­sis filed for bankruptcy in 2022 after a period of distress across the crypto sector, a year that saw a wave of exchange failures. In July 2023, U.S. authorities charged Mashinsky and Cohen-Pavon with fraud and market manipulation related to Celsius’s operations; both executives later pleaded guilty. The legal actions against them formed a broader narrative of accountability in a sector that had been rocked by collapses and restructuring.

In a separate piece of the Celsius saga, Cohen-Pavon was sentenced to time served after pleading guilty in September 2023. Prosecutors cited her “substantial assistance” to the government, including willingness to testify against Mashinsky, as a key factor in the sentence and in concluding the criminal case against the Celsius executives.

Key takeaways

• Alice Mashinsky seeks to vacate his 12-year sentence in SDNY, arguing ineffective assistance of counsel and tainted evidence as grounds for relief.
• The motion arrives in the wake of Mashinsky’s May 2025 sentencing and follows a 2022 Celsius bankruptcy and 2023 indictments of Celsius executives.
• Mashinsky alleges that Sam Bankman-Fried sought to destroy Celsius and points to internal communications suggesting a hostile takeover attempt at Celsius.
• Cohen-Pavon was sentenced to time served after pleading guilty; prosecutors highlighted substantial cooperation, with penalties including more than $1 million in fines and a $40,000 fine.
• Financial consequences for Mashinsky include a $48 million forfeiture from a criminal case and a separate $10 million FTC settlement tied to a multibillion-dollar Celsius judgment, most of which is suspended.

Legal tides around a fallen platform

The Celsius case sits at the intersection of criminal accountability and corporate collapse in a market still grappling with the aftershocks of the 2022 downturn. The move to vacate hinges on nuanced questions about representation and the admissibility of evidence, but it also underscores continuing scrutiny of how individuals and teams behind high-profile crypto platforms are held to legal standards. Mashinsky’s pro se stance adds a layer of procedural complexity, potentially prolonging a series of court filings that have already stretched across years.

From a regulatory perspective, the saga—spanning bankruptcy, indictments, guilty pleas, and settlements—illustrates the breadth of federal interest in the sector’s actors, not just the exchanges themselves. The case also intersects with the broader narrative of post-FTX accountability, where prosecutors have pursued multiple fronts to address alleged deception and market manipulation in the crypto economy.

The financial penalties connected to Celsius’s leadership also illustrate the penalties that can accompany wrongdoing in this space. Mashinsky’s $48 million forfeiture and the $10 million FTC settlement linked to Celsius’s broader judgment reflect the dimensions of civil and criminal consequences that can persist long after a platform’s immediate collapse. Cohen-Pavon’s time-served sentence, alongside more than $1 million in penalties, reinforces that executives may face significant costs even when criminal convictions are resolved.

What investors and crypto builders should watch next

For creditors, investors, and users connected to Celsius assets, the ongoing legal proceedings add a layer of uncertainty to an already unsettled chapter in the company’s history. The pending motion to vacate could, if granted, alter aspects of the sentencing posture and the potential financial exposure linked to the case. Even if the motion does not succeed, the process highlights the persistent risk of legal and reputational disruption surrounding failed platforms and their leadership.

Looking ahead, observers will be watching for a decision on Mashinsky’s vacatur bid, which could influence related sentencing or forfeiture orders. The proceedings also sit within a larger regulatory frame—where authorities are increasingly focused on executive accountability in the wake of major market disruptions. As the Celsius matter continues to unfold, market participants should monitor any formal court rulings, potential settlements, and how these developments might impact remaining creditors, unsecured claims, and the broader narrative around crypto lending platforms’ risk management and governance standards.

Readers should stay attentive to forthcoming court filings and rulings, as they will signal whether the motion to vacate moves forward or stalls. The case remains a key datapoint in understanding how the legal system handles complex criminal and civil actions tied to high-profile crypto platform failures—and what that means for the trajectory of crypto accountability in the years ahead.

The United States has seized roughly $1 billion in Iranian cryptocurrency assets, Treasury Secretary Scott Bessent announced at the Reagan National Economic Forum. He characterized the action as a direct disruption of illicit financial activity, describing it as an outright grab of wallets that some owners may not yet realize have been emptied. The disclosure situates the seizures within a multiyear effort to constrain Iran’s access to international financial networks and to press its leadership economically.

Bessent said the seizures are part of a broader pressure campaign against Iran, known as Operation Economic Fury. Launched in March 2025, the operation combines cryptocurrency takedowns, banking account freezes, and coordinated asset confiscation with European partners. He framed the effort as a sustained, comprehensive push designed to “cut them off” financially, noting that the trajectory over the past five-and-a-half to six weeks has been remarkably effective. “Between five and a half to six weeks of an incredibly successful military campaign and Operation Economic Fury, where we have really cut them off. They are at the end of their Tether now financially,” he stated.

Key takeaways

• The United States reports roughly $1 billion in Iranian crypto assets seized through Operation Economic Fury, including wallet-level takedowns.
• The newly disclosed figure is about twice the $500 million previously announced in late April and well above the $344 million disclosed earlier in the month.
• Officials describe Iran’s financial situation as dire, with high inflation, internal funding pressures, and disruptions to state services and military payrolls.
• The seizures illustrate intensified cross-border enforcement and international cooperation, with implications for crypto compliance, sanctions screening, and banking access for sanctioned states.
• Policy conversations around crypto-enabled shipping and revenue mechanisms—such as Bitcoin-based incentives for Hormuz transit—signal broader state-influenced use cases for digital assets, pending regulatory scrutiny.

Asset seizures: scale, method, and regulatory context

According to officials, the $1 billion in Iranian crypto assets seized under Operation Economic Fury represents a significant escalation in exploiting blockchain-traceable funds linked to sanctioned activity. The strategy appears to rely on identifying wallets associated with state-backed or proxy actors, then applying enforcement measures that repurpose or redirect the assets through compliant channels. The approach also reflects the United States’ broader sanctions toolkit, which increasingly treats certain digital assets as subject to traditional financial and export-control regimes.

The Treasury’s disclosures underscore a shift in how authorities frame enforcement risk for crypto-asset holders connected to sanctioned regimes. By publicly detailing wallet-level seizures and the scale of the assets involved, policymakers and regulated institutions gain a clearer baseline for due diligence, screening, and ongoing monitoring. For exchanges, custodians, and banks with crypto-related business lines, the development raises questions about the diligence required to identify sanctioned wallets, the treatment of seized or frozen crypto, and the timing of any redress or remediation for affected customers.

The previously reported figures provide context for the current disclosure. Officials had announced roughly $500 million in Iranian crypto assets seized in late April and about $344 million in crypto assets seized earlier in the month. The latest figure, therefore, suggests a substantial acceleration in enforcement activity within a relatively short window. These milestones have implications for cross-border regulatory coordination, including parallel actions by allied regulators and law enforcement partners in Europe and beyond. For market observers, the trend highlights the growing intersection of sanctions policy with digital-asset compliance requirements and the need for rigorous KYC/AML controls across custody and exchange ecosystems.

Iran’s economic strain and the geopolitical backdrop

Secretary Bessent painted a picture of severe economic strain within Iran, describing a regime that has allegedly siphoned hundreds of millions of dollars monthly and allocated proceeds among a broad leadership cadre. He suggested inflation could exceed 200 percent, with social subsidies being deployed to mitigate cost-of-living pressures and widespread internet restrictions affecting communications. Reports cited by officials indicate that a substantial portion of Iranian troops have faced delayed or disrupted pay, further complicating the regime’s capacity to project authority and sustain external influence flows.

The statements also reflect the strategic complexity of negotiating with a fractured leadership structure following recent strikes against senior regime figures. While Bessent did not hinge policy outcomes on these internal dynamics alone, the comments underscore how enforcement actions intersect with diplomatic channels, sanctions policy, and potential leverage in any future negotiations surrounding Tehran’s regional posture and long-term security considerations.

These disclosures come at a moment when the U.S. and its allies continue to calibrate sanctions pressure against Iran, balancing the aims of disrupting illicit financial networks with broader regional stability goals. The clearly articulated message is that crypto assets are not beyond the reach of conventional sanctions enforcement, and that dynamic, rapid actions can be employed to disrupt stated objectives even when actors pivot to digital instruments. For compliance teams and risk managers at financial institutions, the implications are twofold: a heightened emphasis on tracing cross-border crypto flows and an expanded mandate to screen counterparties against sanctioned-entity lists in near real time.

Policy implications and regulatory coordination

Beyond the immediate asset seizures, observers are examining the regulatory and policy ramifications for the crypto industry. The operation demonstrates a continued hard line on sanction enforcement, potentially accelerating the development of best practices around sanctions screening, wallet clustering analysis, and the cross-jurisdictional sharing of intelligence related to illicit fund flows. Firms engaged in custody, exchange, or payment processing face heightened expectations to implement robust monitoring, rapid response protocols, and transparent reporting mechanisms when dealing with funds that may be implicated by sanctions regimes.

In parallel, the focus on state-led crypto strategies—such as potential monetization schemes tied to strategic chokepoints—highlights the need for clear regulatory guardrails around crypto-based insurance, settlement, and revenue-sharing models used by states. As reported by Cointelegraph, Iran has been weighing a Bitcoin-based insurance framework to monetize shipping through the Strait of Hormuz, a project that could generate substantial revenue if implemented at scale and supported by compliant, auditable mechanisms. The proposed platform, termed “Hormuz Safe,” would sell digital marine insurance payable in Bitcoin and settled on the blockchain, potentially enabling more than $10 billion in revenue for the country, subject to regulatory approval and international compliance constraints. A separate report cited that some ships could pass Hormuz in exchange for a Bitcoin-denominated tariff of about $1 per barrel of oil. The development underscores the convergence of sovereign financing strategies and digital asset infrastructure, inviting scrutiny from licensing authorities and international financial regulators alike.

For regulated entities, the evolving environment implies a need for heightened vigilance around sanctioned counterparties, as well as clearer guidance from regulators on the permissibility and treatment of crypto assets tied to state operations. The cross-border dimension—where U.S. actions, European cooperation, and potentially other jurisdictions intersect—will likely shape licensing decisions, oversight practices, and the rigor of AML/KYC programs across the global crypto ecosystem. In this context, ongoing updates from U.S. agencies and international partners will be critical reference points for risk managers, legal counsel, and compliance leaders assessing exposure to sanctioned activities or users with ties to Iran or other restricted regimes.

Closing perspective

The scale of the recent seizures, coupled with Iran’s stated economic and strategic pressures, signals a pronounced trend: cryptocurrency is increasingly entangled with state-level sanctions enforcement and foreign policy aims. As authorities pursue more aggressive asset recovery and cross-border cooperation, firms across the crypto value chain must strengthen their compliance programs, enhance real-time monitoring, and prepare for evolving guidance on sanctioned assets and state-backed financial activities. The coming months will likely reveal further operational details and regulatory responses that define how digital assets interface with traditional sovereignty and enforcement mechanisms.

For further context, authorities and industry observers continue to monitor related developments, including prior disclosures and coverage of Iran-related crypto actions. In particular, Cointelegraph has reported on related seizures and policy discussions, illustrating the ongoing convergence of sanctions policy, crypto regulation, and geopolitical risk management.

Retail investors remain central to Bitcoin’s demand dynamics, even as institutional players deepen exposure through regulated products. In a Cointelegraph interview conducted at BitcoinVegas 2026 and published to YouTube, Swan Bitcoin CEO Cory Klippsten argued that the market’s backbone is still retail-driven, not solely controlled by the big players.

“It’s not like BlackRock owns the Bitcoin and Fidelity owns the Bitcoin. It’s a bunch of retail accounts mostly that actually buy that,” Klippsten said during the conversation, underscoring that real on-chain demand underpins price movements even when ETFs and wrappers provide access. He noted that even buyers via institutional wrappers still have to take real supply and custody it, which implies the demand is genuine and exits supply as bitcoins move from sellers to holders.

Data points surrounding the evolving ETF landscape add nuance to the story. US-based spot Bitcoin ETFs have posted a combined $2.90 billion in net outflows since May 15, according to Farside data, while Bitcoin has fallen about 9.5% over the same period. At the time of publication, Bitcoin was trading around $73,630 per CoinMarketCap. The broader market has also cooled: Bitcoin has declined about 2.87% over the past 30 days, per CoinMarketCap. Amid this backdrop, market sentiment remains fragile, with the Crypto Fear & Greed Index oscillating toward the lower end of the spectrum and signaling cautious positioning among investors.

Klippsten’s reflections on the year intersect with a cautious mood among traders. The interview took place against a backdrop of ongoing volatility in 2026, and the outlook for a fresh Bitcoin all-time high has grown more conservative since Bitcoin traded near $95,000 earlier in the year. He estimated a roughly 50% chance of a new high at that time, but as the price slipped and traded in the 70s, he adjusted the odds downward to about 20–25% for a new high within 2026.

Key takeaways

• Retail demand remains a primary driver of Bitcoin markets, even as institutional products gain traction.
• US spot Bitcoin ETFs have posted about $2.90 billion in net outflows since May 15, according to Farside data, while BTC has fallen roughly 9.5% over the same period.
• Bitcoin’s price hovered near $73,630 at the time of reporting, with a ~2.87% 30-day decline on CoinMarketCap data.
• The Crypto Fear & Greed Index sat in “Extreme Fear” territory, reflecting a cautious market mood in 2026.
• Klippsten’s revised view for 2026 places the odds of a new Bitcoin all-time high at around 20–25%, down from earlier expectations near 50% when prices were higher.

Retail demand vs. ETF access: a persistent tension

The Swan Bitcoin chief framed the narrative as a tension between accessible fiat wrappers and the underlying on-chain reality. While ETFs and futures provide entry points for a broader audience, the actual flow of coins—withdrawn, held, and controlled by investors—drives real supply dynamics. That distinction, he argued, matters for how investors should assess risk and opportunity in a market that remains closely tied to on-chain realities rather than purely paper products.

In this framing, the accessibility of Bitcoin through traditional financial products coexists with the necessity for custody and settlement that characterizes on-chain activity. The result is a market in which paper constructs can widen participation but cannot replace the fundamental mechanics of supply and demand that move Bitcoin’s price.

ETF flows, price action, and the mood of 2026

Farside’s data showing $2.90 billion in net outflows from US spot Bitcoin ETFs since mid-May highlights a critical headwind for ETF-driven narratives. Yet price action suggests a more nuanced picture: BTC has fallen roughly 9.5% over the same window, even as retail and non-traditional buyers continue to transact on-chain. The current price around $73,630 contrasts with the year’s earlier peaks, underscoring the danger of extrapolating from episodic inflows or outflows alone.

Market sentiment has reflected the scramble for direction. The Crypto Fear & Greed Index, a sentiment gauge tracking whether investors are cautiously pessimistic or aggressively optimistic, registered in the Extreme Fear zone on the latest reading, signaling a period of conservative positioning and heightened risk aversion among participants.

Outlook for 2026: a tempered trajectory for a new high

Looking ahead, Klippsten’s view on Bitcoin’s potential to make a new all-time high in 2026 leans toward caution. After seeing Bitcoin retreat from roughly $95,000 earlier in the year, the odds of a fresh high have narrowed. He estimated a roughly 20–25% chance of hitting a new peak within the year, down from a more sanguine 50% when prices were higher. The evolution of ETF flows, macro risk signals, and on-chain metrics will be critical to watch as the year unfolds.

These dynamics come as investors weigh the relative strength of on-chain demand against the noise of regulated access products and evolving market structure. The conversation around retail participation, custody realism, and the path to mass adoption remains central to how market participants interpret price action and risk in the months ahead.

What to watch next

As 2026 progresses, readers should monitor several developments to gauge the balance between on-chain demand and institutional access: incoming and outgoing flows in spot Bitcoin ETFs, shifts in on-chain transaction activity and custody patterns, and quarterly updates on investor sentiment as new data arrives. The ongoing debate over the role of regulated wrappers versus pure on-chain demand will continue to shape how traders position for potential volatility and how builders design services that align with real supply and demand dynamics.

In the near term, attention will likely center on ETF-related activity, price catalysts around macro headlines, and evolving retail participation. Whether retail demand can sustain constructive pressure on supply will be a key variable for readers watching Bitcoin’s longer-term trajectory into the second half of 2026.

The S&P 500’s longest weekly winning streak since 2023 and Brent crude settling near $92 on U.S.-Iran ceasefire hopes have failed to pull bitcoin BTC$73,472.05 and ether (ETH) higher, with the two largest cryptocurrencies finishing the week down nearly 3% as cooling spot bitcoin ETF inflows reinforced the pullback.

The S&P 500 posted its ninth consecutive weekly gain on Friday, the longest such run since 2023 and a streak matched only a handful of times in the past four decades, putting the index up almost 20% from its March lows.

Brent crude settled around $92 a barrel and Treasuries climbed on the week, trimming some of their war-driven losses.

The macro tailwind has come on hopes the U.S. and Iran will sign off on a 60-day ceasefire extension. President Donald Trump said Friday he was ready to make a “final determination” on a preliminary agreement but restated his demand that any deal require Iran to abandon its nuclear program, surrender its enriched uranium and open the Strait of Hormuz.

Crypto did not move with the tape. Bitcoin slipped 2.6% over the past seven days to $73,445, ether 2.5% to $2,011, solana (SOL) 2.2% to $82.42 and TRON’s TRX 5.6%, its worst weekly drop in the top 10, according to CoinDesk data.

DOGE$0.1009 finished roughly flat. The slide came alongside softer spot bitcoin ETF inflows, which was flagged this week as adding to the downward pressure even as macro conditions improved.

The exception was the smaller side of the leaderboard. Hyperliquid’s HYPE token ripped 19.4% on the week to $65 as sentiment for the asset continues to grow. Intercontinental Exchange chief Jeffrey Sprecher praised the decentralized perpetuals venue at a Bernstein conference and calling it “bigger than NASDAQ.” BNB closed up 1.9% and XRP eked out a 0.7% weekly gain.

The Iran deal still needs Trump’s signature, and the red lines he restated on Friday sit well beyond what Iran has indicated it would accept publicly. The macro rally is one bad headline from reversing.

A venture capitalist who has spent a decade backing deep-tech and quantum hardware startups says the bitcoin BTC$73,451.76 industry is fixated on the wrong half of the quantum problem, the wallet keys instead of the encrypted messages already moving between exchanges, bridges and custodians today.

“The financial system’s most dangerous vulnerability isn’t stored data, it’s the data
moving between institutions right now,” Andrew Gault, CEO of networking firm ZeroTier, told CoinDesk in a recent chat.

“Every interbank message, every payment authentication record, and every digital signature traveling across a network today is being collected by sophisticated adversaries who don’t need to read it yet,” he noted.

“CISOs and security teams have been trained to protect data at rest. What nobody wants to say out loud is that the adversary’s strategy has changed. They’re patient, they have storage, and they’re building a library of today’s encrypted traffic to decrypt the moment quantum capability crosses the threshold,” he added.

Gault is CEO of networking firm ZeroTier and a founding partner of 7percent Ventures, a London- and San Francisco-based deep-tech firm whose portfolio includes British quantum-computing startup Universal Quantum.

The Google Quantum AI research that rattled bitcoin in March showed a sufficiently powerful quantum computer could derive a bitcoin private key from an exposed public key in about nine minutes, came from outside his portfolio.

The conversation since that paper has centered on the roughly 6.9 million BTC sitting in addresses with exposed public keys and Bitcoin’s missing post-quantum migration plan.

But Gault says the more urgent exposure is the data already being collected off the open internet for decryption later, regardless of whether a working quantum computer exists yet.

Google’s own security engineers have moved the same direction. In a March post, the company set 2029 as its target for completing a post-quantum cryptography migration, citing progress on quantum hardware, error correction and factoring resource estimates.

The post, written by Google vice president of security engineering Heather Adkins and senior cryptography engineer Sophie Schmieg, said the company has reprioritized its internal threat model to focus on authentication services and digital signatures, the same wire-level signing infrastructure Gault has been pointing at.

“The threat to encryption is relevant today with store-now-decrypt-later attacks,” the post said.

The strategy driving that urgency is known in cryptography circles as “harvest now, decrypt later.” It assumes adversaries don’t need to read encrypted traffic today, only store it cheaply until a sufficiently powerful quantum computer arrives.

Citi modeled the bank-system version of the scenario in February, estimating a quantum-enabled attack on a single top-five U.S. bank’s access to the Fedwire Funds Service payment system could trigger a $2 trillion to $3.3 trillion cascade across the U.S. economy, equal to a 10% to 17% decline in real GDP.

The Global Risk Institute, cited in the same Citi report, puts the probability of a cryptographically relevant quantum computer arriving by 2034 at between 19% and 34%.

For crypto, the wire-level surface is broader than the wallet one. Cross-chain bridge proofs, exchange API authentication packets, signed transactions broadcast and archived in public mempools, and the back-channel signing traffic between cold storage and trading desks all sit on the same vulnerability spectrum as the bank-grade encryption Citi was modeling.

CoinShares argued in a February report that the wallet-key fear is overstated, estimating only about 10,200 BTC are concentrated enough to move markets if stolen.

Gault’s worry is a different one. “The particularly uncomfortable reality for financial institutions is that the authentication records being harvested aren’t just sensitive,” he said. “It’s the proof layer that determines who owns what, who authorized which transaction, and who bears legal liability.”

Ethereum (ETH) has launched a coordinated post-quantum migration, but Bitcoin has not done the same. Major crypto exchanges and custodians, where most of the signing traffic lives, have not publicly committed to one either.