Celsius CEO legal settlement bars Mashinsky from New York’s financial industries

Former Celsius CEO Alex Mashinsky faces a permanent ban from New York’s financial industries and up to $35 million in conditional payments under a legal settlement secured by Attorney General Letitia James on October 9, 2026. The agreement adds state penalties to his federal fraud conviction and 12-year prison sentence.

Key takeaways

• Mashinsky is permanently excluded from New York’s securities, commodities and cryptocurrency industries.
• The settlement’s payments depend on federal forfeiture and completion of his prison sentence.
• Celsius bankruptcy distributions exceeded $3.4 billion as of August.

According to CoinDesk, the agreement settles the state’s civil case against Mashinsky, whom James sued in 2023. She accused him of giving hundreds of thousands of investors false assurances about the safety of deposits held at Celsius, including those of more than 26,000 New Yorkers.

The former Celsius CEO’s legal settlement sets conditional payments

The settlement requires Mashinsky to pay New York $25 million if he does not surrender $10 million in ill-gotten gains to the federal government, according to the attorney general’s office. A separate $10 million payment applies if he fails to complete his prison sentence.

Alongside those financial conditions, the agreement permanently prohibits him from working in New York’s securities, commodities and cryptocurrency industries. The permanent industry ban is part of the state settlement, separate from his federal criminal punishment.

Fraud allegations and federal punishment

After entering a guilty plea on charges tied to securities and commodities fraud, Mashinsky is now serving a 12-year federal prison sentence. The Commodity Futures Trading Commission also permanently barred him from commodities activity in June.

The state’s allegations centered on how he represented the lender’s safety. James said he misled investors, including more than 26,000 New Yorkers, about the security of their Celsius deposits.

Celsius bankruptcy recovery exceeds $3.4 billion

Customers and creditors had received more than $3.4 billion through Celsius bankruptcy proceedings as of August, James said. The lender stopped customer withdrawals in June 2022, then sought bankruptcy protection in July 2022.

When Celsius emerged from bankruptcy in 2024, it had planned approximately $3 billion in distributions comprising cryptocurrency and cash. That plan used Coinbase and PayPal to handle payments.

James challenges Celsius’ safety claims

James said Mashinsky presented Celsius as safer than a bank even as the lender pursued risky strategies with customer assets and hid losses. Those representations were part of her account of how investors were misled.

“I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers,” James said.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.