Key Takeaways
- • New York Attorney General Letitia James secured a settlement under which Celsius founder Alex Mashinsky must pay up to $35 million, with the amount contingent on conditions, according to Cointelegraph and MLex reporting dated October 9.
- • Mashinsky is permanently barred from the cryptocurrency, securities and commodities industries under the agreement, which resolves a civil lawsuit filed by New York in 2023.
- • Under the terms, Mashinsky must pay New York $25 million unless he makes an additional $10 million payment on top of assets already forfeited to the federal government, and a further $10 million if he does not complete his prison term.
- • Mashinsky is serving a 12-year federal prison sentence after pleading guilty in December 2024 to securities and commodities fraud, and was separately ordered to forfeit more than $48 million in assets.
- • The case centers on Celsius, which attracted about $20 billion in digital assets with yields of as much as 17% a year before freezing withdrawals in June 2022 and filing for bankruptcy the following month.
Summary
New York Attorney General Letitia James announced a settlement with Alex Mashinsky, co-founder and former CEO of Celsius Network, under which he is permanently barred from the cryptocurrency, securities and commodities industries. According to Cointelegraph, which reported the development on October 9, the agreement can require Mashinsky to pay as much as $35 million, depending on specified conditions.
The settlement resolves a civil lawsuit New York filed in 2023 alleging that Mashinsky falsely promoted Celsius as a safe investment to hundreds of thousands of investors before the company collapsed. Under the terms, Mashinsky must pay New York $25 million unless he makes an additional $10 million payment on top of assets already forfeited to the federal government. A further $10 million is payable if he does not complete his prison term.
Mashinsky is currently serving a 12-year federal prison sentence on fraud charges. He pleaded guilty in December 2024 to securities and commodities fraud and was separately ordered to forfeit more than $48 million in assets. In announcing the settlement, James said Mashinsky had promised New Yorkers that Celsius was a safe place to invest their life savings, but left them broke when the company's reckless bets unraveled.
Celsius drew roughly $20 billion in digital assets by offering yields of as much as 17% annually. The firm took on increasingly risky investments to sustain those returns, froze customer withdrawals in June 2022 and filed for bankruptcy the following month, when the gap between its assets and liabilities exceeded $1 billion.
The settlement resolves a civil lawsuit New York filed in 2023 alleging that Mashinsky falsely promoted Celsius as a safe investment to hundreds of thousands of investors before the company collapsed. Under the terms, Mashinsky must pay New York $25 million unless he makes an additional $10 million payment on top of assets already forfeited to the federal government. A further $10 million is payable if he does not complete his prison term.
Mashinsky is currently serving a 12-year federal prison sentence on fraud charges. He pleaded guilty in December 2024 to securities and commodities fraud and was separately ordered to forfeit more than $48 million in assets. In announcing the settlement, James said Mashinsky had promised New Yorkers that Celsius was a safe place to invest their life savings, but left them broke when the company's reckless bets unraveled.
Celsius drew roughly $20 billion in digital assets by offering yields of as much as 17% annually. The firm took on increasingly risky investments to sustain those returns, froze customer withdrawals in June 2022 and filed for bankruptcy the following month, when the gap between its assets and liabilities exceeded $1 billion.
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