New York Permanently Bars Celsius Founder Mashinsky in $35M Fraud Settlement

Published October 10, 2026, 10:45 PKT. Based on the New York Attorney General's settlement announcement on October 9, 2026, reported by CoinDesk and Cointelegraph.

New York Attorney General Letitia James announced Friday that she has permanently barred former Celsius CEO Alex Mashinsky from working in the securities, commodities and cryptocurrency industries, under a settlement that can cost him up to $35 million. The deal resolves the state's 2023 civil lawsuit accusing Mashinsky of misleading hundreds of thousands of investors about the safety of their Celsius deposits.

The $35 million payment ladder

None of the $35 million is due unconditionally, the attorney general's office said. Mashinsky must pay New York $25 million if he fails to forfeit $10 million in ill-gotten gains to the federal government on top of assets already surrendered under his federal plea agreement. He owes a further $10 million if he does not serve his full prison sentence, which is overseen by the Bureau of Prisons.

The state sued Mashinsky in January 2023, alleging he marketed Celsius as safer than a bank while the company used customer assets in risky strategies and concealed the resulting losses. According to the attorney general's office, more than 26,000 New Yorkers were among the hundreds of thousands of investors misled about the platform's safety.

A permanent industry ban

The lifetime ban closes the door on any return to finance for the 60-year-old founder. It covers the securities, commodities and cryptocurrency industries, and it stacks on top of earlier bans: the Commodity Futures Trading Commission permanently barred Mashinsky from commodities activity in June 2026, and the Federal Trade Commission's April settlement with Mashinsky included a suspended $4.7 billion judgment and a ban on his participation in crypto and financial services.

Mashinsky is already serving a 12-year federal prison sentence after pleading guilty in December 2024 to securities and commodities fraud. He was separately ordered to forfeit more than $48 million to the federal government.

The $20 billion collapse

Celsius drew in roughly $20 billion in digital assets by offering yields of as much as 17% a year, according to reporting on the platform's collapse. It froze customer withdrawals in June 2022 and filed for bankruptcy the following month, leaving a gap between assets and liabilities that exceeded $1 billion. The attorney general's office said Celsius customers and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August 2026.

This article is news reporting and is not investment advice.

Sources

• Office of the New York Attorney General, settlement announcement with Alex Mashinsky (Oct. 9, 2026), primary source for the ban, payment terms and case figures
• CoinDesk, Celsius' Alex Mashinsky hit with $35M penalty and permanent ban in NY legal settlement (Oct. 9, 2026), secondary source for the payment conditions and background
• Cointelegraph, NY AG Secures Up to $35M in Celsius Founder Alex Mashinsky Settlement (Oct. 9, 2026), secondary source for the conditional payment structure and federal forfeiture figures