Mashinsky's "Safer Than a Bank" Promise Now Costs Him Up to $35M and a Lifetime Crypto Ban 🏦❄️

New York Attorney General Letitia James announced Friday that former Celsius Network CEO Alex Mashinsky has been permanently barred from the securities, commodities and cryptocurrency industries under a settlement that includes up to $35 million in conditional payments. The deal resolves a 2023 civil lawsuit accusing Mashinsky of defrauding hundreds of thousands of investors, including more than 26,000 New Yorkers, by promoting Celsius as a safer alternative to banks while allegedly concealing high-risk investments and mounting losses. "Alex Mashinsky promised New Yorkers that his company was a secure place to invest their hard-earned savings, only to leave them penniless when his risky investments collapsed," James said. "I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers."

Under the settlement, 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 forfeited, and another $10 million if he does not serve his full prison sentence. Mashinsky, who pleaded guilty in December 2024 to securities and commodities fraud, is serving a 12-year federal sentence handed down in May 2025. Prosecutors had sought 20 years. He was also ordered to forfeit more than $48 million and has moved to vacate his conviction. Mashinsky was arrested in July 2023 and released on $40 million bail ahead of trial. One New York resident mortgaged two properties to invest with Celsius, and a disabled veteran lost $36,000 that had taken him nearly a decade to save, according to the attorney general's office.

Celsius attracted roughly $20 billion in digital assets by early 2022 and offered yields as high as 17% before freezing customer withdrawals in June 2022 and filing for bankruptcy the following month, disclosing a shortfall of more than $1 billion between assets and liabilities. The company emerged from bankruptcy in 2024 and has distributed more than $3.4 billion to creditors as of August 2026. He forfeited all of his claims to bankruptcy proceeds.

The New York agreement follows separate federal settlements earlier this year. In June, the Commodity Futures Trading Commission permanently barred Mashinsky from trading and registering with the agency, completing the regulator's first case against a digital asset lending platform. An April settlement with the Federal Trade Commission barred him from working in crypto and finance and required a $10 million payment alongside a largely suspended $4.72 billion judgment. The Securities and Exchange Commission reached an agreement in principle with Mashinsky in September, and a federal judge dismissed its separate civil lawsuit without prejudice on Sept. 29 pending finalization.