Alex Mashinsky, the founder of Celsius Network, promoted the company as offering yields as high as 17%, according to New York’s 2023 civil lawsuit. The lawsuit alleged that he concealed risky investments and mounting losses.
By early 2022, Celsius had attracted roughly $20 billion in digital assets. It froze customer withdrawals in June 2022, then filed for bankruptcy in July 2022. The bankruptcy disclosed a shortfall of more than $1 billion between its assets and liabilities.
New York Attorney General Letitia James sued Mashinsky in 2023, accusing him of misleading hundreds of thousands of investors about the safety of Celsius before its collapse.
Mashinsky pleaded guilty to securities and commodities fraud in December 2024. He is serving a 12-year federal prison sentence and was ordered to forfeit more than $48 million.
James announced on Friday that her office had reached a settlement with Mashinsky, filed October 8. He admitted violating New York’s Martin Act through false or materially misleading statements and omissions concerning Celsius’s regulatory matters.
The agreement permanently bars Mashinsky from the securities, commodities and cryptocurrency industries. It also requires up to $35 million in conditional payments tied to federal forfeiture requirements and completion of his 12-year prison sentence.
The state’s $25 million in damages will be satisfied if Mashinsky pays $10 million to the Department of Justice under his federal forfeiture order. If he does not meet that federal payment requirement, the full $25 million becomes due to the attorney general’s office.
Payments made after May 20, 2025, count dollar-for-dollar towards the $10 million federal forfeiture requirement. A separate $10 million judgment is tied to his imprisonment and becomes payable if he does not serve his full sentence as mandated by the criminal court.
Creditors had received more than $3.4 billion through Celsius’s bankruptcy proceedings as of August 2026.
The New York agreement follows other enforcement actions. In April, a Federal Trade Commission settlement barred Mashinsky from working in crypto and finance, required a $10 million payment and included a largely suspended $4.72 billion judgment. In June, the Commodity Futures Trading Commission permanently barred him from trading and registering with the agency.
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