At a glance

  • New York Attorney General Letitia James said on Friday that Alex Mashinsky, co-founder and former chief executive of lender Celsius Network, agreed to a permanent ban from the securities, commodities and cryptocurrency industries and to payments of up to $35 million.
  • The money is owed only if he fails to pay $10 million under his federal forfeiture order ($25 million) or does not serve his full prison sentence ($10 million), according to the consent order.

The attorney general’s office announced the settlement of its 2023 lawsuit against Mashinsky in a press release on 9 Oct. The office said he misled hundreds of thousands of investors, including more than 26,000 in New York, about the safety of Celsius.

“I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers,” James said. “We took action to hold Mashinsky accountable, and now we are barring him from the securities industry so he cannot take advantage of investors again.”

In a stipulation dated 8 Oct, Mashinsky admits he violated New York’s Martin Act and Executive Law 63(12). The admissions cover false and misleading statements to investors about Celsius’s approval by regulators and misstatements about his own sales of the CEL token. The document also records his guilty pleas to two counts in the federal criminal case. It bars him from publicly denying the order’s findings, with an exception for his petition for relief under 28 U.S.C. § 2255 in that case.

What the ban covers

Apart from his own personal purchases and sales, the consent order bars Mashinsky from issuing, selling, promoting, advertising or managing securities or commodities, “including cryptocurrency and digital assets”, and from giving investment advice. He may not work in such a business in any capacity, including as an officer, consultant or salesperson.

It also bars him from writing, publishing or distributing advice on buying or selling those assets for compensation, in print or by video or streaming, and from forming or working for an entity that solicits investors.

The payments

The order sets two sums. Mashinsky owes $25 million in damages unless he pays $10 million to the US Department of Justice under paragraph 11 of his federal forfeiture order. Payments to the department after 20 May 2025 count dollar for dollar toward that $10 million.

He owes a separate $10 million judgment unless he completes his criminal sentence. That condition lapses if a court overturns or reduces the sentence, or if it is cut through compassionate release, good-time or earned-time credits, early release under the First Step Act or Bureau of Prisons home confinement. The order names a successful § 2255 petition as one route.

In any later proceeding by the attorney general, including a bankruptcy claim that the debt cannot be discharged, the facts in its complaint are to be treated as admitted, the order says.

Background

A federal judge sentenced Mashinsky on 8 May 2025 to 144 months (12 years) in prison and ordered him to forfeit $48,393,446, according to the order. The attorney general’s office says Celsius creditors had received more than $3.4 billion in the bankruptcy as of August 2026, and that Celsius founders and executives paid $16.5 million to the Federal Trade Commission.

Celsius paid yield on customer deposits through its Earn program; see how DeFi lending works for the on-chain version of that model. Earlier today we reported on a legal dispute filed in London this week.

The court retains jurisdiction to enforce the order, and the attorney general can seek civil or criminal contempt for any violation, according to the document. The copy we read, filed on 8 Oct in New York County Supreme Court under index number 450040/2023, does not show the judge’s signature.

This article is for information only and is not investment advice.