Celsius founder Mashinsky settles with New York, accepts permanent crypto industry ban

New York Attorney General Letitia James said on Oct. 9 she had reached a settlement worth up to $35 million (about 47 billion won) with Alex Mashinsky, co-founder and former chief executive of bankrupt crypto deposit and lending platform Celsius Network. Under the deal, Mashinsky is permanently barred from the securities, commodities and cryptocurrency industries. The agreement brings to a close a lawsuit New York filed against him in 2023.

A $35 million figure with conditions attached

The potential payments are subject to two separate conditions. According to the attorney general's office, Mashinsky must pay New York $25 million if he fails to forfeit $10 million in ill-gotten gains to the federal government. He must pay a further $10 million if he does not serve his full prison sentence. If both conditions are triggered, the total reaches $35 million.

The industry ban applies without conditions. Mashinsky can no longer work in securities, commodities or cryptocurrency in New York. The Commodity Futures Trading Commission (CFTC) also permanently barred him from commodities activity in June, according to CoinDesk. "I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers," James said in the statement.

Pitched as safer than a bank

When New York sued Mashinsky in January 2023, it alleged he repeatedly made false statements about Celsius's safety to persuade hundreds of thousands of investors to deposit billions of dollars in digital assets on the platform. More than 26,000 of those investors were New Yorkers. The attorney general's office said Celsius lost hundreds of millions of dollars on risky investments, which Mashinsky concealed, and that he never registered as a securities and commodities dealer or salesperson.

Celsius attracted users by offering high yields on deposited crypto. It froze customer withdrawals in June 2022 and filed for bankruptcy protection a month later, in July. Customer assets locked up when withdrawals were halted totaled $4.7 billion.

When Celsius emerged from bankruptcy in 2024, it planned to distribute roughly $3 billion in crypto and cash to creditors and began payouts through Coinbase and PayPal.

Already serving 12 years on criminal charges

In a separate federal criminal case, Mashinsky pleaded guilty to commodities fraud and securities fraud in December 2024 and was sentenced in May 2025 to 12 years in prison, which he is now serving. The court also ordered him to forfeit more than $48 million. Mashinsky and other executives bought large amounts of Celsius's own token, CEL, on the open market to push up its price, at times using customer deposits. Investigators found Mashinsky made about $48 million from selling his own CEL holdings.

Celsius customers and creditors have so far received more than $3.4 billion through the bankruptcy process, according to the attorney general's office. Celsius founders and executives also paid $16.5 million to the Federal Trade Commission (FTC). The case was handled by the Investor Protection Bureau within the office's Division for Economic Justice.

As of the morning of Oct. 10 KST, CEL was not listed on the Korean won markets of Upbit or Bithumb, or on Binance's spot market. It cannot be traded directly on Korean exchanges.