Alex Mashinsky, co-founder and former CEO of Celsius Network, was permanently barred from operating in the cryptocurrency, securities and commodities sectors after a settlement with the New York Attorney General's Office, announced on Friday (9). The agreement also provides for financial obligations of up to US$ 35 million, but the payments depend on specific conditions and do not represent funds already recovered by the state.
The decision ends the civil action filed in 2023 by Attorney General Letitia James, who accused Mashinsky of deceiving hundreds of thousands of investors about the safety and financial strategies of Celsius. Among those affected were more than 26,000 New York residents.
Mashinsky is already serving a 12-year federal prison sentence in a separate criminal case. In that case, the court also ordered the forfeiture of more than US$ 48 million in assets.
Payments of US$ 25 million and US$ 10 million depend on specific conditions
The settlement establishes two distinct financial obligations. The first requires Mashinsky to pay US$ 25 million to New York if he does not turn over another US$ 10 million in illicit gains to the federal government, in addition to the previously seized assets.
The second provides for an additional payment of US$ 10 million if the businessman does not fully serve the prison sentence ordered by the federal court, under the conditions supervised by the American prison system.
Unlike the permanent ban on operating in the financial market, these obligations do not constitute immediate payments. The announced maximum amount depends on the occurrence of the situations set forth in the settlement.
The Attorney General's Office also reported that more than US$ 3.4 billion was distributed to Celsius creditors through August 2026. That amount, however, belongs to the company's bankruptcy process and does not correspond to funds obtained under the new civil settlement.
Celsius offered yields on cryptocurrencies deposited by customers. According to the state investigation, Mashinsky promoted the platform as a safe alternative to banks, while investor funds were directed to high-risk operations that caused losses of hundreds of millions of dollars.
The settlement announced in October establishes a permanent restriction on Mashinsky's professional activity and maintains financial obligations conditioned on compliance with federal orders.
