New York settled with Celsius’s Mashinsky for up to $35M and a lifetime industry ban

On 9 October 2026, New York Attorney General Letitia James announced she had secured up to $35 million from Alex Mashinsky, the founder and former CEO of Celsius Network, and a permanent ban preventing him from working in the securities, commodities or cryptocurrency industries. The settlement resolved the civil suit James filed in 2023 alleging he misled hundreds of thousands of investors about the safety of their Celsius deposits, including more than 26,000 New Yorkers.

The money is structured as pressure valves: Mashinsky must pay the state $25 million unless he forfeits $10 million in ill-gotten gains to the federal government, and a further $10 million if he fails to serve his full prison sentence. He is already serving 12 years for securities and commodities fraud after pleading guilty, and the CFTC permanently barred him from commodities activity in June 2026.

Celsius froze customer withdrawals in June 2022 and filed for bankruptcy a month later. Customers and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August 2026; the estate emerged in 2024 planning roughly $3 billion in distributions via Coinbase and PayPal. James said Mashinsky had promoted Celsius as safer than a bank while the company used customer assets in risky strategies and concealed losses.

Up to $35 million: $25 million unless he forfeits $10 million in gains to the federal government, plus $10 million more if he skips prison time; permanent industry ban.

Mashinsky personally fronted the ‘safer than a bank’ pitch while Celsius deployed customer assets into risky strategies and hid losses.

The civil case ran on its own track from the criminal prosecution, aiming at restitution and an industry ban rather than prison.

The payment terms were engineered around his federal forfeiture and sentence, so dodging either triggers the full $35 million.

The permanent ban extends accountability past the prison term across securities, commodities and crypto industries at once.

A civil regulator can price a fraudster’s future even after the criminal court is done: the ban outlasts the sentence and closes every door the prison does not.

The settlement closed the New York civil front of the Celsius collapse, stacking on the 12-year federal sentence and the CFTC’s June 2026 permanent ban. Bankruptcy distributions to customers and creditors passed $3.4 billion by August 2026. Mashinsky remains imprisoned; the ban follows him on release.