TL;DR
- New York’s attorney general reached a settlement with Alex Mashinsky involving payments of up to $35 million and a permanent ban from the cryptocurrency, securities, and commodities industries.
- Mashinsky is serving a 12-year federal prison sentence for fraud. He was accused of misleading hundreds of thousands of investors about the safety of Celsius.
- Celsius customers and creditors have recovered more than $3.4 billion through the company’s bankruptcy proceedings.
New York Attorney General Letitia James announced a settlement with Alex Mashinsky, former CEO of Celsius Network, involving payments of up to $35 million and a permanent ban from participating in the cryptocurrency, securities, and commodities industries.
The settlement resolves the civil lawsuit filed against Mashinsky in 2023, which accused him of misleading hundreds of thousands of investors, including more than 26,000 New York residents, about the safety of their deposits and Celsius’s investment strategies.
Mashinsky Faces Additional Financial Obligations
Under the terms of the settlement, Mashinsky must pay $25 million to New York State if he does not surrender $10 million in ill-gotten gains to the federal government.
He must also pay an additional $10 million if he does not serve his full prison sentence, bringing the potential total under the settlement to $35 million.
Mashinsky is currently serving a 12-year federal prison sentence after pleading guilty to securities and commodities fraud.
Prosecutors argued that the former executive promoted Celsius as a safer alternative to banks, even as the platform used customer funds for risky investments and concealed losses.
Celsius Has Distributed More Than $3.4 Billion to Creditors
Celsius suspended customer withdrawals in June 2022 and filed for bankruptcy one month later.
According to the New York Attorney General’s Office, customers and creditors had received more than $3.4 billion through the bankruptcy proceedings as of August 2026.
The former CEO also faces restrictions imposed by other U.S. regulators. In April, the Federal Trade Commission (FTC) reached a settlement that included a suspended $4.7 billion judgment, a $10 million payment, and permanent restrictions on participating in financial and cryptocurrency services.
In June, the Commodity Futures Trading Commission (CFTC) also imposed permanent bans preventing him from trading and registering in markets under its supervision.
Letitia James said her office took action to prevent Mashinsky from exploiting investors again through cryptocurrency-related activities.
