New York Permanently Bans Celsius Founder Mashinsky, Sets Up to $35M in Conditional Payments

Alex Mashinsky, the former chief executive of collapsed crypto lender Celsius Network, has agreed to a settlement with New York Attorney General Letitia James that permanently bars him from working in cryptocurrency, securities and commodities. The agreement, announced Friday, also sets out payments that could total as much as $35 million, with amounts triggered by whether Mashinsky forfeits additional funds and completes his full prison term. New York's attorney general said the settlement closes a 2023 civil lawsuit that accused Mashinsky of misleading hundreds of thousands of investors about Celsius's safety before the company failed in 2022. Under the terms, Mashinsky must pay New York $25 million if he does not forfeit an additional $10 million to the federal government beyond assets already surrendered. He would owe another $10 million to New York if he does not serve his full prison sentence. The attorney general's office described the structure as a way to hold him accountable for promoting Celsius as a safe place for savings while customers ultimately lost access to funds they believed were protected. New York's earlier complaint alleged Mashinsky marketed Celsius as a safer alternative to traditional banking while advertising yields as high as 17%. Regulators said the company concealed growing losses and risky positions. The lawsuit said that by early 2022 Celsius had drawn roughly $20 billion in digital assets but could not generate sufficient revenue to support the promised returns, pushing it toward increasingly risky behavior. Celsius froze customer withdrawals in June 2022 and filed for bankruptcy in July 2022. Bankruptcy filings showed a gap of more than $1 billion between assets and liabilities. New York said that as of August 2026, more than $3.4 billion had been distributed to creditors through the bankruptcy process. The New York settlement adds to a series of actions by U.S. regulators. In June, the Commodity Futures Trading Commission permanently barred Mashinsky from trading and registering with the agency. In April, the Federal Trade Commission barred him from working in crypto and finance and required a $10 million payment, alongside a largely suspended $4.72 billion judgment. The Securities and Exchange Commission reached an agreement in principle with Mashinsky in September to resolve its civil case; a federal judge dismissed that matter without prejudice on Sept. 29 while final settlement paperwork is completed. On the criminal side, Mashinsky is serving a 12-year federal prison sentence following a December 2024 guilty plea to securities and commodities fraud, according to the U.S. Department of Justice. Mashinsky has also moved to challenge the federal conviction and sentence. Since May, he has sought to vacate the judgment while representing himself. Federal prosecutors opposed the effort in August, calling his arguments "without merit" in filings cited in reporting. A judge denied his discovery request, and an Oct. 5 order left that decision in place. Mashinsky has until Dec. 11 to respond to the government's opposition. Because the settlement ties an additional $10 million payment to whether he serves his full term, the outcome of those efforts could affect the amount ultimately owed to New York.