Celsius Co-Founder Mashinsky Hit With Lifetime Industry Ban in $35M New York Fraud Deal
Attorney General Letitia James of New York obtains lifetime prohibition from crypto industry for Celsius co-founder Alex Mashinsky, including potential $35 million payment contingent on federal requirements.
Alex Mashinsky, who previously led Celsius as CEO, faces a lifetime prohibition from participating in cryptocurrency, securities, and commodities sectors following a settlement agreement with Attorney General Letitia James of New York that could result in up to $35 million in payments subject to specific conditions.
Announced on Friday, the settlement with New York authorities resolves a civil case filed in 2023 that alleged Mashinsky deceived hundreds of thousands of people who invested with Celsius regarding the platform's security prior to its 2022 implosion.
The terms of the settlement require Mashinsky to remit $25 million to New York authorities should he not forfeit an additional $10 million in unlawfully obtained proceeds to federal authorities beyond what has already been surrendered, plus an additional $10 million should he fail to complete his entire prison term.
Currently, Mashinsky is incarcerated while serving a 12-year federal sentence for fraud charges and received a separate order requiring forfeiture exceeding $48 million. His federal conviction resulted from a guilty plea entered in December 2024 to charges involving securities and commodities fraud.
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.
Letitia James, New York Attorney General
Celsius promised high yields before collapse
As the calendar turned to early 2022, Celsius had accumulated approximately $20 billion worth of digital assets, yet the platform faced challenges generating sufficient revenue to meet its promised yield commitments, leading to progressively riskier investment strategies, based on findings from the CFTC.
The platform halted all customer withdrawal requests in June 2022 before proceeding to file bankruptcy proceedings one month later, revealing a deficit exceeding $1 billion when comparing its total assets against its liabilities.
Through the bankruptcy process, creditors of Celsius have received distributions totaling more than $3.4 billion as of August 2026, based on information provided by the Office of the New York Attorney General.
Previous federal settlements and legal challenges
This settlement with New York comes after Mashinsky reached separate resolution agreements with federal regulatory agencies earlier in the year. The Commodity Futures Trading Commission (CFTC) issued a lifetime ban in June preventing Mashinsky from trading activities and registration with the commission. Prior to that, an April agreement with the Federal Trade Commission had already prohibited his involvement in cryptocurrency and financial sectors while mandating a $10 million payment, in addition to a $4.72 billion judgment that was mostly suspended.
In September, the Securities and Exchange Commission (SEC) also arrived at a preliminary agreement with Mashinsky to resolve its independent civil action, which a federal judge dismissed without prejudice on Sept. 29 while awaiting completion of the settlement terms.
Beginning in May, Mashinsky launched efforts to overturn his federal conviction and sentencing, conducting his own legal representation throughout these proceedings. In August, federal prosecutors filed opposition to his motion, characterizing his legal arguments as "without merit."
His petition for discovery was rejected by a judge, with an Oct. 5 order maintaining that ruling. The deadline for Mashinsky to file his response to the government's opposition brief has been set for Dec. 11.