New York Attorney General Letitia James has announced a settlement with Alex Mashinsky, co-founder and former CEO of Celsius Network, which permanently prohibits him from participating in the securities, commodities, and cryptocurrency industries. The agreement sets out that up to $35 million will be obtained from Mashinsky if he does not fulfill certain legal and financial obligations.
Agreement Terms and Legal Outcomes
According to the attorney general’s office, Mashinsky is required to pay New York $25 million should he fail to forfeit $10 million of illicit gains to the federal government, in addition to assets already surrendered. An additional $10 million will be due if he does not serve his entire prison term.
Currently, Mashinsky is serving a 12-year federal sentence after pleading guilty to charges of commodities and securities fraud. The Commodity Futures Trading Commission reported that on December 3, 2024, he admitted guilt and was sentenced on May 8, 2025. As part of the federal case, he was ordered to forfeit $48.4 million. On June 18, 2025, the CFTC announced that a consent order permanently barred him from trading, registration, or participating in any CFTC-regulated activities.
Celsius Network, which Mashinsky co-founded, was a cryptocurrency lending platform that filed for bankruptcy, resulting in widespread investor losses.
Mini dictionary: Commodity Futures Trading Commission (CFTC), the US federal agency responsible for regulating the derivatives and futures markets, including those for commodities and cryptocurrencies.
Celsius Bankruptcy and Asset Distribution
The attorney general’s office stated that more than $3.4 billion has been returned to creditors affected by the Celsius bankruptcy as of August 2026, following one of the most significant collapses in the cryptocurrency lending market.
| Event | Amount | Date |
|---|---|---|
| Federal forfeiture order | $48,393,446 | May 8, 2025 |
| Assets returned to creditors | $3.4 billion | August 2026 |
| Potential NY settlement (max) | $35 million | Announced June 2026 |
Investigation and Industry Implications
In January 2023, the New York Attorney General’s office filed a lawsuit against Mashinsky accusing him of misleading hundreds of thousands of users about the safety of Celsius Network, including over 26,000 individuals in New York. The office concluded that Mashinsky repeatedly characterized Celsius as safer than a bank, despite lacking even basic federal or state regulatory protections.
The investigation further found that investor funds were deployed in high-risk ventures, with many resulting in losses that were concealed from the public. The attorney general also identified Mashinsky’s failure to register as either a salesperson or dealer under New York law.
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. I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers.
Letitia James encouraged individuals working in the crypto sector who observe misconduct to submit whistleblower complaints, noting that these can be filed confidentially.
