New York's top prosecutor, Letitia James, has permanently barred Alex Mashinsky, the former chief executive of Celsius Network, from participating in the securities, commodities and crypto industries. She also announced a conditional settlement that could require him to pay up to $35 million depending on his compliance with other legal obligations.
Background
James sued Mashinsky in 2023, alleging that he defrauded hundreds of thousands of investors by portraying Celsius as a safe place to deposit funds while actually using customer assets in high-risk strategies. The platform collapsed in 2022, leaving many investors with substantial losses. According to her office, more than 26 000 of the affected investors reside in New York, including one homeowner who mortgaged two properties and a disabled veteran who lost $36 000 saved over nearly a decade.
Settlement terms
The agreement reached with the attorney general allows New York to claim as much as $35 million, but only under specific conditions. If Mashinsky fails to surrender an additional $10 million of illicit proceeds to the federal government as part of his plea deal, he must pay the state $25 million. Alternatively, if he does not serve the full prison term imposed on him, he would owe $10 million. The payments are therefore contingent on his adherence to other court-ordered obligations.
Legal and financial consequences
Mashinsky pleaded guilty to fraud and was sentenced in May 2025 to 12 years in federal prison; prosecutors had sought a longer term. He was also ordered to forfeit more than $48 million. Prior to trial, he was arrested in July 2023 and released on $40 million bail. Separately, the Commodity Futures Trading Commission has issued a permanent ban on his trading activities, and he settled with the Federal Trade Commission for $10 million, which likewise bars him from the crypto industry. As of August 2026, Celsius creditors had recovered more than $3.4 billion through the bankruptcy process, and Mashinsky has relinquished any claim to those proceeds.
Why it matters
The action underscores how state authorities are using both civil and criminal tools to address alleged misconduct in the crypto lending space. By imposing industry bans and tying financial penalties to compliance with existing sentences, the New York attorney general aims to deter similar conduct and provide a measure of redress to affected investors. The case also illustrates the overlapping reach of federal agencies, state prosecutors and bankruptcy courts in resolving the aftermath of a major crypto-platform collapse.
