NY Permanently Bars Celsius Founder Mashinsky in $35M Fraud Settlement

Former Celsius CEO Alex Mashinsky has been permanently barred from the cryptocurrency, securities, and commodities industries under a settlement with New York Attorney General Letitia James, announced Friday. The agreement resolves a 2023 civil fraud lawsuit and includes up to $35 million in conditional payments, with Mashinsky required to pay New York $25 million if he fails to forfeit an additional $10 million in ill-gotten gains to the federal government, plus another $10 million if he does not serve his full prison sentence.

Mashinsky, who is serving a 12-year federal prison sentence for fraud following his December 2024 guilty plea to securities and commodities fraud, was separately ordered to forfeit more than $48 million. The New York lawsuit accused him of misleading hundreds of thousands of investors by promoting Celsius as a safer alternative to banks while allegedly concealing risky investments and mounting losses. At its peak, Celsius attracted roughly $20 billion in digital assets and offered yields as high as 17%, but froze customer withdrawals in June 2022 and filed for bankruptcy the following month, disclosing a shortfall exceeding $1 billion between assets and liabilities.

"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," James said in Friday's announcement. As of August 2026, more than $3.4 billion had been distributed to Celsius creditors through bankruptcy proceedings. The New York agreement follows separate federal settlements, including a June action by the Commodity Futures Trading Commission that permanently barred Mashinsky from trading and registering with the agency.