Shlomi Daniel Leon and Hanoch “Nuke” Goldstein, co-founders of Celsius Network, agreed to pay a combined $6.5 million in settlements with the Federal Trade Commission. The regulatory action resolves fraud allegations tied to the 2022 collapse of the once-prominent crypto lending platform.
Breakdown of Settlements
The FTC’s latest orders require Leon, who served as Celsius’s chief strategy officer, to pay $4.1 million according to a ruling by U.S. District Judge Denise Cote. This payment forms part of a much larger $4.72 billion judgment, with the majority suspended as long as Leon complies with the terms of the settlement.
Goldstein, formerly the company’s chief technology officer, has been directed to pay $2.4 million in a separate court order. Like Leon, he faces a suspended liability for the remaining portion of the judgment, contingent on ongoing compliance.
Mini dictionary: Federal Trade Commission (FTC), a US government agency that enforces consumer protection and antitrust laws with the aim to prevent deceptive or unfair business practices.
In addition to the financial penalties, both Leon and Goldstein are permanently prohibited from promoting or distributing products in the cryptocurrency space.
| Individual | Current/Past Role | Settlement Amount | Other Penalties |
|---|---|---|---|
| Shlomi Daniel Leon | Chief Strategy Officer | $4.1 million | Permanent crypto ban |
| Hanoch “Nuke” Goldstein | Chief Technology Officer | $2.4 million | Permanent crypto ban |
| Alex Mashinsky | Chief Executive Officer | $10 million | Lifetime crypto ban, 12-year prison sentence |
Allegations of Misleading Claims
The FTC initiated legal action against Celsius Network in July 2023, alleging that the company misrepresented the safety and insurance of user deposits. Celsius promoted itself as a safe alternative to traditional banks, claiming to hold sufficient reserves and insurance coverage to protect clients’ assets.
The company advertised unrestricted withdrawal access and asserted it maintained a $750 million insurance policy on customer funds, as well as a policy against issuing unsecured loans. However, federal regulators found that Celsius had distributed $1.2 billion in unsecured loans by April 2022 and never acquired the promoted insurance coverage.
Federal authorities determined that company leaders continued to assure customers their deposits were secure even as the company neared bankruptcy, contradicting the actual risks facing users’ funds.
Celsius halted user withdrawals in June 2022 and proceeded to declare bankruptcy in July of the same year. At its peak, Celsius oversaw around $25 billion in assets for customers, but following its collapse, users collectively lost access to approximately $4.7 billion.
Legal Consequences for Co-Founders
These settlements follow a previous agreement by former CEO Alex Mashinsky in April, in which he agreed to a $10 million payment and accepted a lifetime ban from marketing financial products involving assets.
Collectively, the three Celsius co-founders have paid $16.5 million under the terms of their settlements with the FTC, which contribute toward the $4.72 billion civil judgment related to alleged consumer damages.
Mashinsky, who led the company as chief executive officer, also received a permanent trading ban from the Commodity Futures Trading Commission and, in May 2025, was sentenced to 12 years in prison and ordered to forfeit more than $48 million after pleading guilty to commodities and securities fraud.
Mini dictionary: Commodity Futures Trading Commission (CFTC), a US federal agency that regulates futures, options, and swaps markets to protect against fraud and abusive practices.
Customer Recoveries Progress Independently
Meanwhile, Celsius bankruptcy proceedings have advanced outside the FTC’s settlements. In August 2025, the company began its third round of creditor distributions, totaling about $220.6 million and bringing the recovery rate up to nearly 65% of approved claims at that time.
After the finalization of settlements with Leon and Goldstein, the FTC concluded all cases against the three company co-founders that were named in its original 2023 complaint.
