The name CELSIUS is famously associated with two vastly different companies that have each faced significant legal challenges. For consumers, the legal issues pertain to the popular energy drink brand, Celsius Holdings. For investors, the concern involves the now-bankrupt cryptocurrency lending platform, Celsius Network. While the similar names have caused confusion, the lawsuits, reasons, and outcomes are entirely separate.
The Energy Drink Lawsuits: Celsius Holdings, Inc.
Celsius Holdings, the company behind the widely available energy drink, has faced multiple lawsuits related to its marketing and business practices.
The "No Preservatives" Class Action
One of the most notable consumer lawsuits involved the company's claim that its products contained "no preservatives".
- The Allegation: The lawsuit, which resulted in a 2023 settlement, alleged that this claim was misleading because the drinks contain citric acid. Plaintiffs argued that citric acid functions as a preservative, a claim the company denied, stating it was for flavor.
- The Settlement: To avoid the risks and costs of ongoing litigation, Celsius agreed to a settlement, and customers who purchased beverages between January 1, 2015, and November 23, 2022, were eligible for a payout.
- The Payout: Individuals could receive up to $250 with proof of purchase and a smaller amount without it.
The Flo Rida Contract Dispute
Beyond consumer claims, Celsius Holdings was also engaged in a high-profile legal battle with rapper Flo Rida.
- The Issue: Flo Rida sued the company, alleging it breached a contract with him during his time as a brand ambassador. He claimed Celsius failed to provide him with stock options and royalties he was owed.
- The Verdict: A South Florida jury sided with Flo Rida, awarding him a substantial $82.6 million judgment against the company in 2023.
FDA and "Misbranded" Allegations
In a more recent development, Celsius Holdings faced another class action in February 2024, alleging that its Live Fit drinks were "misbranded". The complaint argued the company was unlawfully selling the drinks without seeking FDA approval, marketing them as an unapproved new drug. The lawsuit claimed the company's failure to comply gave it an unfair advantage over competitors.
The Cryptocurrency Fraud Lawsuits: Celsius Network, LLC
Separate from the energy drink's legal troubles, the crypto lending platform Celsius Network collapsed in 2022 amidst a cascade of financial mismanagement and fraud.
Alexander Mashinsky's Criminal Charges
At the center of Celsius Network's downfall was its founder and former CEO, Alexander Mashinsky. Federal prosecutors charged him with orchestrating a multibillion-dollar fraud and market manipulation scheme.
- The Fraud: Mashinsky publicly assured investors of the company's financial stability and safety, even as he personally withdrew millions in crypto assets from the platform. He was also accused of manipulating the price of Celsius's native token, CEL.
- The Consequences: After pleading guilty to commodities fraud, Mashinsky was sentenced in May 2025 to 12 years in prison and ordered to pay $48 million in forfeiture. For more details, see the official press release from the U.S. Department of Justice(https://www.justice.gov/usao-sdny/pr/founder-celsius-sentenced-12-years-fraud-and-market-manipulation).
Celsius Network's Bankruptcy and Investor Losses
Celsius Network filed for Chapter 11 bankruptcy in July 2022, leaving hundreds of thousands of investors with $4.7 billion in inaccessible assets. The collapse was preceded by the company halting customer withdrawals, trapping investor funds.
The Tether Settlement
In an effort to recover assets for creditors, the Celsius bankruptcy estate pursued lawsuits against third parties, including stablecoin issuer Tether. In October 2025, Tether settled the lawsuit for $299.5 million. While a fraction of the $4 billion initially sought, the settlement provides a significant recovery for Celsius creditors.
Comparison of Celsius Legal Issues
| Aspect | Celsius Holdings (Energy Drink) | Celsius Network (Crypto) |
|---|---|---|
| Core Business | Manufacturing and selling energy drinks and supplements. | Providing crypto asset lending and interest-bearing accounts. |
| Key Lawsuits | "No Preservatives" class action, Flo Rida contract dispute, "Misbranded" FDA class action. | Massive fraud charges against CEO, bankruptcy proceedings, clawback lawsuits against customers, legal disputes with partners like Tether. |
| Primary Issue | Allegations of misleading advertising and breach of contract. | Criminal fraud, market manipulation, financial mismanagement, and misrepresentation of company's health. |
| Main Impact | Financial payouts to consumers for alleged deceptive marketing; high-profile celebrity damages award. | Catastrophic loss of billions in customer funds; criminal conviction of founder; recovery efforts via bankruptcy and legal action. |
| Current Status | Ongoing business operations, with legal issues mostly settled or ongoing. | Bankrupt and in the process of a complex asset recovery and wind-down. |
What to Expect from Ongoing Litigation
For Celsius Holdings, Inc., the legal landscape is relatively stable following the major settlements. The company is actively selling and marketing its products. Any future legal challenges will likely continue to center on advertising claims or product contents, but for now, the most significant consumer issues have been addressed.
In stark contrast, the legal fallout from Celsius Network is far from over. The crypto platform is in a complex wind-down process, with the focus on maximizing asset recovery for creditors. Ongoing lawsuits, such as those against customers who withdrew funds (clawback lawsuits), demonstrate the lingering and painful consequences of the company's collapse. The bankruptcy process and related legal actions will continue for some time as the estate works to distribute recovered funds.
Conclusion
The dual legal crises linked to the name CELSIUS underscore the importance of distinguishing between the two companies. While the energy drink faced consumer protection issues, the crypto lending platform was the site of a devastating criminal fraud that led to its collapse and the imprisonment of its founder. For the energy drink, the legal challenges are largely addressed, while the crypto platform's legal aftermath will be felt by investors for years to come. The lawsuits serve as a stark reminder for consumers to research the companies behind the products and services they use, especially when a similar name can mask such different circumstances.
