Letitia James Bans Celsius (CEL) Founder Mashinsky for Life in $35 Million Settlement

A Lifetime Ban Announced Friday

New York Attorney General Letitia James has permanently barred Alex Mashinsky, the co-founder and former chief executive of Celsius Network, from working in the securities, commodities and cryptocurrency industries, a settlement announced on Friday, October 9. The deal attaches a penalty of up to $35 million that the state collects only if Mashinsky breaches commitments he made under a separate federal agreement that already placed him in prison. James sued Mashinsky on January 5, 2023, alleging he misled hundreds of thousands of depositors, including more than 26,000 New Yorkers, about how safe their money was on the crypto lender. Per the attorney general's office, he promoted Celsius as safer than a bank while the company deployed customer assets in risky strategies and concealed losses, and he never registered for the securities and commodities roles the rules require. The ban reaches beyond executive seats: it covers operating, promoting and advising digital asset businesses, paid financial commentary, promotional work and soliciting clients for crypto firms. Deposit records show many customers treated the platform like a savings account, holding balances in a crypto wallet the lender controlled. James said in a statement, “I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers.”

Two Conditional Payments, One Default

The $35 million figure splits into two conditional payments under the stipulation filed in the case. Mashinsky owes New York $25 million if he fails to forfeit $10 million in ill-gotten gains to the federal government, on top of assets he has already surrendered; qualified payments made after May 20, 2025 count toward that $10 million requirement. A further $10 million is treated as satisfied only if he serves his full prison term, with early release, humanitarian release, sentence reductions and certain home confinement programs all capable of triggering the payment. The carve-out matters because the criminal court already ordered forfeiture of $48,393,446, plus a $50,000 fine and three years of supervised release. In plain terms, if Mashinsky forfeits the federal amount and completes his 144-month sentence, nothing flows to New York; the state collects only through default. The stipulation exempts his personal spot trading in digital assets, though that exception does not override the existing federal bans, and the state court keeps jurisdiction to pursue violations through civil or criminal contempt. Separately, Celsius creditors have recovered more than $3.4 billion through the bankruptcy proceeding as of August, after withdrawals froze in June 2022 and the lender filed for Chapter 11 a month later; the reorganization that took effect on January 31, 2024 routed roughly $3 billion in crypto and cash to creditors through Coinbase and PayPal.

The Regulators Who Banned Him First

The New York deal is the latest layer on a stack of existing restrictions. Under a Federal Trade Commission settlement reached on April 28, Mashinsky pays $10 million under a suspended $4.7 billion judgment and submitted to an 18-year reporting regime that cuts him off from crypto and financial services; Celsius founders and executives together paid $16.5 million to resolve claims over the misleading deposit-safety promises. In June, the Commodity Futures Trading Commission entered permanent trading and registration bans through a consent order issued June 12 and published June 18, covering commodity interests, the agency's umbrella term for derivatives such as futures, swaps and crypto options. Mashinsky is serving 144 months under a 12-year federal sentence handed down on May 8, 2025, after he pleaded guilty to commodities and securities fraud, including manipulating the CEL price through trades designed to prop up the platform's own token; he earned roughly $48 million from token sales while publicly claiming he had not sold. His file with regulators is not closed: the Securities and Exchange Commission sued him in July 2023 over an alleged unregistered offering and CEL manipulation, told a federal court in late May that settlement talks were substantive, and received another 60 days to keep negotiating. A deal on the same terms as the other agencies would add another lifetime ban.

What the Ban Actually Costs

Our reading is that the headline number is smaller than it looks. Every dollar of the $35 million sits behind conditions that require Mashinsky to break the same federal commitments that cap his prison time at 12 years, so the realistic teeth of the New York settlement are the industry-wide ban and the state court's contempt jurisdiction. The open SEC case is the item to track next: a settlement mirroring the FTC and CFTC terms would extend the ban further, and the complaint's claims over the CEL offering keep the question of the token's security status alive. Unlike a memecoin pump run by anonymous promoters, the CEL case shows regulators treating issuer-side trading of an established token as commodities and securities fraud, a precedent that reaches any project whose team trades its own supply.