Former Celsius CEO Alex Mashinsky has been permanently banned from the cryptocurrency, securities and commodities industries under a settlement with New York Attorney General Letitia James that includes a conditional payment of up to $35 million.
New York contractAnnounced Friday, Mashinsky settled a 2023 civil lawsuit alleging he misled hundreds of thousands of investors about Celsius’s safety ahead of Celsius’ 2022 collapse.
Under the settlement, Mashinsky must pay $25 million to New York if he fails to forfeit an additional $10 million in earned profits to the federal government beyond the already forfeited assets, and another $10 million if he does not serve his full prison sentence.
Mashinsky is serving a 12-year federal prison sentence for fraud and was separately ordered to forfeit more than $48 million. Federal sentencing is scheduled for December 2024 application Securities and product fraud.
“Alex Mashinsky promised New Yorkers that his company was a safe place to invest their hard-earned savings, only to leave them destitute when his risky investments collapsed,” James said in Friday’s announcement.
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Celsius promised high yields before the fall
As of 2023 caseMashinsky promoted Celsius as a safe alternative to banks, offering yields as high as 17% and allegedly concealing risky investments and mounting losses.
As of early 2022, Celsius had attracted roughly $20 billion in digital assets, but struggled to generate enough revenue to sustain its pledges. returnAccording to the CFTC, the incentives for increasingly risky investments.
CFTC’s July 2023 fraud complaint against Alex Mashinsky and Celsius Networks. Source: CFTC
Celsius froze customer withdrawals in June 2022 and filed for bankruptcy the following month, revealing a shortfall of more than $1 billion in assets and liabilities.
As of August 2026, there was more than $3.4 billion to distribute Celsius creditors through the bankruptcy process, according to the New York Attorney General’s Office.
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Previous federal settlements and legal challenges
The New York deal follows a separate settlement with 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 had already barred him from working in crypto and finance and required him to pay $10 million, along with a $4.72 billion suspended judgment.
The Securities and Exchange Commission (SEC) reached an agreement in principle in September to settle its separate civil lawsuit with Mashinsky, which a federal judge dismissed Finalization of the settlement is pending on Sept. 29 without prejudice.
Since May, Mashinsky has been representing himself at trial in an attempt to vacate his federal conviction and sentence. Federal prosecutors opposed his motion in August, calling his arguments “without merit.”
a judge denial His request for discovery, and an Oct order That decision remains unchanged. Mashinsky has until December 11 to respond to the government’s opposition to his application.
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