Celsius Founder Mashinsky Banned From Crypto Industry in $35 Million New York Settlement

TLDR

• New York Attorney General Letitia James secured a settlement with former Celsius CEO Alex Mashinsky worth up to $35 million.
• Mashinsky is permanently barred from the cryptocurrency, securities and commodities industries in New York.
• He is currently serving a 12-year federal prison sentence for fraud tied to Celsius’s 2022 collapse.
• More than $3.4 billion has been returned to Celsius creditors through bankruptcy proceedings.
• The deal follows earlier bans and settlements from the FTC and CFTC earlier this year.

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Former Celsius Network CEO Alex Mashinsky has agreed to a new settlement with the New York Attorney General’s office. The deal was announced on Friday.

We’re barring Alex Mashinsky, the former CEO of Celsius, from the financial industry after he promised New Yorkers that his company was a secure place to invest their savings, only to leave them penniless.

I won’t allow scammers to prey on unsuspecting New Yorkers. https://t.co/c4WYcFbKEi

— NY AG James (@NewYorkStateAG) October 9, 2026

Attorney General Letitia James said Mashinsky could owe up to $35 million under the agreement. The settlement also bars him permanently from the cryptocurrency, securities and commodities industries.

This resolves a civil fraud lawsuit James filed against Mashinsky back in 2023. That lawsuit accused him of misleading investors about how safe Celsius really was.

How the Settlement Works

The payment structure is conditional. Mashinsky must pay $25 million if he does not forfeit an extra $10 million in gains to federal authorities.

He must pay another $10 million if he fails to complete his full prison sentence. Mashinsky is already serving 12 years in federal prison for fraud.

That sentence followed his guilty plea in December 2024 to securities and commodities fraud charges. He was also ordered to forfeit more than $48 million separately.

“Alex Mashinsky promised New Yorkers that his company was a secure place to invest their hard-earned savings, only to leave them penniless when his risky investments collapsed,” James said in a statement.

Celsius Promised High Returns Before Collapsing

The original lawsuit claimed Mashinsky marketed Celsius as safer than a bank. He offered yields as high as 17 percent to customers.

Prosecutors said he hid risky investments and growing losses from users. By early 2022, Celsius held about $20 billion in digital assets.

The company could not generate enough revenue to keep paying its promised returns. This pushed Celsius into riskier bets, according to the Commodity Futures Trading Commission.

Celsius froze customer withdrawals in June 2022. It filed for bankruptcy the following month.

At the time, the company disclosed a shortfall of more than $1 billion between what it owed and what it had. As of August 2026, creditors have received over $3.4 billion back through the bankruptcy process.

This is not Mashinsky’s first regulatory penalty this year. In April, the Federal Trade Commission settled with him, barring him from crypto and finance work.

That FTC deal included a $10 million payment and a largely suspended judgment of $4.72 billion. In June, the Commodity Futures Trading Commission also permanently barred him from trading and registering with the agency.

The Securities and Exchange Commission reached its own agreement with Mashinsky in September. A federal judge dismissed that related lawsuit without prejudice on September 29 while the settlement is finalized.

Mashinsky has been trying to overturn his federal conviction since May. He is representing himself in those proceedings.

Federal prosecutors pushed back against his request in August, calling his arguments without merit. A judge denied his request for discovery.

An October 5 order kept that decision in place. Mashinsky now has until December 11 to respond to the government’s opposition to his petition.