New York Bans Celsius Founder for Life and Orders Him to Pay Up to $35 Million

New York State Attorney General Letitia James announced a settlement that permanently bars former Celsius CEO Alex Mashinsky from working in the cryptocurrency, securities, and commodities sectors, and provides for conditional payments of up to $35 million.

Under the settlement, Mashinsky is obligated to pay $25 million to New York if he does not forfeit an additional $10 million in ill-gotten gains to the federal government beyond the assets he has already forfeited, and pay another $10 million if he does not complete his prison sentence. He is currently serving a 12-year federal prison sentence for fraud, having been ordered to forfeit more than $48 million following his guilty plea in December 2024 to securities and commodities fraud charges.

The settlement resolves a civil fraud lawsuit filed in 2023 in which New York accused him of misleading hundreds of thousands of investors, as Celsius was promoted as a "safer than banks" option with yields reaching up to 17%, while concealing risks and losses. By early 2022, the platform had attracted nearly $20 billion in digital assets before withdrawals were frozen in June 2022 and the company filed for bankruptcy the following month with a deficit exceeding $1 billion. James stated that Mashinsky "promised New Yorkers that his company was a safe place to invest their savings," but "left them broke when his risky investments collapsed."

The settlement comes as part of a multi-agency enforcement action. The Commodity Futures Trading Commission imposed a permanent ban on Mashinsky in June, and the Federal Trade Commission reached a settlement in April banning him from working in the financial sector, which included a $4.72 billion judgment, most of which was suspended. In September, the Securities and Exchange Commission reached a preliminary agreement with Mashinsky to settle its separate civil lawsuit, before a federal judge dismissed the case without prejudice on September 29 pending the completion of the settlement.

What Do These Terms Mean?

Settlement: An agreement that resolves a legal dispute between two parties before a final judgment is rendered, involving mutual obligations accepted by both sides.

Forfeiture of Funds: A legal procedure forcing a convicted individual to surrender funds or assets obtained from unlawful activity to the state.

Securities: Tradable financial instruments such as stocks and bonds, subject to oversight by regulatory authorities to protect investors.

Cryptocurrencies: Digital assets traded across electronic networks without a central banking intermediary, characterized by extreme volatility in value.