New York Attorney General (NYAG) Letitia James has reached a settlement that permanently bars Alex Mashinsky, co-founder and former chief executive of the cryptocurrency lending platform Celsius Network, from the securities, commodities, and cryptocurrency industries while securing up to $35 million in conditional payments from him.
The agreement, announced on October 9, 2026, resolves a civil lawsuit filed by James’s office in 2023.
That action accused Mashinsky of defrauding hundreds of thousands of investors—more than 26,000 of them in New York—by misrepresenting Celsius’s safety in order to attract billions of dollars in digital asset deposits.
Celsius subsequently lost hundreds of millions of dollars on high-risk investments that Mashinsky allegedly sought to conceal.
He also failed to register as a salesperson for the platform or as a securities and commodities dealer, violating New York law.
The platform’s eventual collapse left many depositors financially devastated.
Under the terms of the settlement, Mashinsky is permanently prohibited from conducting business in the securities, commodities, and cryptocurrency sectors.
He is already serving a 12-year federal prison sentence stemming from a parallel criminal prosecution in which he was ordered to forfeit more than $48 million.
Celsius creditors have received more than $3.4 billion through the company’s bankruptcy proceedings.
James stated that Mashinsky had assured New Yorkers his company offered a secure place for their savings, only for those funds to be wiped out when risky bets collapsed.
She emphasized that her office would not permit individuals to exploit cryptocurrencies to target unsuspecting residents and that the industry ban is intended to prevent him from harming investors again.
Celsius operated as a cryptocurrency lending service that promised elevated returns on deposited digital assets.
Mashinsky served as its primary public representative, appearing frequently in media interviews, public events, and social media posts to promote the platform and solicit customers.
An investigation by the Office of the Attorney General determined that he misled investors regarding the platform’s safety, the size of its user base, and the nature of its investment activities.
He repeatedly asserted that Celsius was safer than a traditional bank, despite the fact that it was not subject to the same rigorous federal or state banking oversight, thereby exposing customer funds to substantial risk.
While he claimed the platform engaged only in safe, low-risk investments and lent assets exclusively to reputable counterparties, customer holdings were in practice deployed in high-risk strategies that generated losses he allegedly hid from the public.
Individual investors suffered significant personal losses; one New York resident mortgaged two properties to place funds with Celsius, and a disabled veteran lost $36,000 that had taken nearly a decade to accumulate.
The monetary component of the settlement is conditional.
Mashinsky must pay New York $25 million if he fails to forfeit an additional $10 million in ill-gotten gains to the federal government beyond assets already surrendered under his plea agreement.
He faces a further $10 million obligation to the state if he does not complete the full prison term ordered by the criminal court and administered by the Bureau of Prisons.
As of August 2026, more than $3.4 billion had already been distributed to Celsius creditors in bankruptcy.
Separately, Celsius founders and executives were required to pay $16.5 million to resolve related Federal Trade Commission charges.
The case was handled by attorneys from the Investor Protection Bureau within James’s Division for Economic Justice. The resolution adds a state-level industry ban and contingent financial remedies to the federal criminal penalties and bankruptcy distributions already in place.