New York AG secures up to $35 million in conditional Mashinsky settlement payments

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. The agreement includes up to $35 million in conditional payments. The settlement, announced Friday, resolves a 2023 civil lawsuit accusing Mashinsky of misleading hundreds of thousands of investors about Celsius's safety before its 2022 collapse.

Under the settlement, Mashinsky must pay New York $25 million if Mashinsky fails to forfeit an additional $10 million in ill-gotten gains to the federal government beyond assets already forfeited. Mashinsky must pay New York another $10 million if Mashinsky does not serve the full prison sentence. Mashinsky is serving a 12-year federal prison sentence for fraud. Mashinsky was separately ordered to forfeit more than $48 million. The federal sentence stems from Mashinsky's December 2024 guilty plea to securities and commodities fraud.

James said Friday that Mashinsky promised New Yorkers a secure place to invest their savings but left those investors penniless when Mashinsky's risky investments collapsed. The 2023 lawsuit alleges that Mashinsky promoted Celsius as a safer alternative to banks, offering yields as high as 17%. The lawsuit alleges that Mashinsky concealed risky investments and mounting losses. The Commodity Futures Trading Commission (CFTC) said Celsius had attracted roughly $20 billion in digital assets by early 2022. The CFTC said Celsius struggled to generate enough revenue to sustain promised returns, prompting increasingly risky investments.

Celsius froze customer withdrawals in June 2022. Celsius filed for bankruptcy the following month, disclosing a shortfall of more than $1 billion between assets and liabilities. The New York Attorney General's Office said more than $3.4 billion had been distributed to Celsius creditors through bankruptcy proceedings as of August 2026.

The New York agreement follows separate settlements with federal regulators earlier this year. The CFTC permanently barred Mashinsky from trading and registering with the agency in June. An April settlement with the Federal Trade Commission barred Mashinsky from working in crypto and finance. The April settlement required a $10 million payment, along with a largely suspended $4.72 billion judgment. The Securities and Exchange Commission reached an agreement in principle with Mashinsky in September to settle the commission's separate civil lawsuit. A federal judge dismissed that lawsuit without prejudice on September 29, pending finalization of the settlement.

Mashinsky has been seeking to vacate the federal conviction and sentence since May, representing himself in the proceedings. Federal prosecutors opposed Mashinsky's motion in August, calling Mashinsky's arguments "without merit." A judge denied Mashinsky's request for discovery. An October 5 order left that decision unchanged. Mashinsky has until December 11 to respond to the government's opposition to Mashinsky's petition.