New York permanently bars Celsius founder Mashinsky from crypto industry in $35M settlement
NYAG bans Celsius founder in $35M conditional settlement
New York Attorney General Letitia James announced a settlement that permanently bars former Celsius CEO Alex Mashinsky from the cryptocurrency, securities, and commodities industries. The agreement includes up to $35 million in conditional payments.
The settlement resolves a 2023 civil fraud lawsuit that accused Mashinsky of misleading hundreds of thousands of investors about the safety of Celsius before the platform collapsed in 2022.
Key terms of the agreement
- Mashinsky must pay New York $25 million if he fails to forfeit an additional $10 million to the federal government beyond assets already seized.
- He owes another $10 million if he does not serve his full 12-year federal prison sentence.
- Mashinsky was ordered to forfeit more than $48 million in federal proceedings stemming from his December 2024 guilty plea to securities and commodities fraud.
What the lawsuit alleged
The 2023 suit claimed Mashinsky promoted Celsius as a safer alternative to banks while offering yields as high as 17 percent. Prosecutors alleged he concealed risky investments and mounting losses from investors.
By early 2022, Celsius had attracted roughly $20 billion in digital assets. The company struggled to generate enough revenue to sustain its promised returns and turned to increasingly risky investments, according to the CFTC. Celsius froze customer withdrawals in June 2022 and filed for bankruptcy the following month, disclosing a shortfall exceeding $1 billion between assets and liabilities.
As of August 2026, more than $3.4 billion had been distributed to Celsius creditors through bankruptcy proceedings, according to the New York Attorney General's Office.
Regulatory actions build across agencies
The New York settlement follows separate actions by federal regulators earlier this year. In June, the Commodity Futures Trading Commission (CFTC) permanently barred Mashinsky from trading and registering with the agency. An April settlement with the Federal Trade Commission (FTC) barred him from working in crypto and finance, required a $10 million payment, and included a largely suspended $4.72 billion judgment.
The Securities and Exchange Commission (SEC) also reached an agreement in principle with Mashinsky in September to settle its separate civil lawsuit. A federal judge dismissed the SEC case without prejudice on September 29, pending finalization of the settlement.
Legal challenges continue in federal court
Since May, Mashinsky has been seeking to vacate his federal conviction and sentence, representing himself in the proceedings. Federal prosecutors opposed his motion in August, calling his arguments "without merit." A judge denied his request for discovery, and an October 5 order left that decision unchanged. Mashinsky has until December 11 to respond to the government's opposition to his petition.
Why this matters
The settlement marks the latest in a series of regulatory actions against one of the highest-profile figures in the crypto industry. It adds New York's enforcement to bans already imposed by the FTC, CFTC, and an impending SEC settlement, effectively locking Mashinsky out of multiple regulated financial sectors.
What happens next
Mashinsky has until December 11 to respond to the government's opposition to his petition to vacate his federal conviction. The New York settlement terms will take effect based on whether he meets the forfeiture and sentencing conditions outlined in the agreement.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.