New York Attorney General Letitia James ( Letitia James ) has permanently banned the former Celsius Network CEO, Alex Mashinsky, from entering the securities, commodities, and crypto industries, and has obtained compensation of up to $35 million from him/her.
The Office of the Attorney General of New York State announced on Friday that the aforementioned payment was subject to conditions: if Mashinsky failed to hand over an additional $10 million in illicit gains to the federal government as per his plea agreement, he would be required to pay $25 million to the state of New York; if he did not serve the full term of his sentence, he would have to pay an additional $10 million as well.
Mashinsky is currently requesting the court to overturn his 12-year prison sentence.
In 2023, James sued Mashinsky, accusing him of misleading hundreds of thousands of investors regarding the security of this crypto lending platform, which went bankrupt in 2022, including over 26,000 investors from New York State.
An investigation by the Office of the Attorney General found that Mashinsky repeatedly claimed that Celsius was safer than banks, but in reality, customer assets were used for high-risk investments, and the resulting losses were concealed by them.
According to the Office of the Attorney General, a resident of New York State once mortgaged two properties to invest Celsius; another disabled veteran lost $36,000, which was the savings he had accumulated over nearly a decade.
James stated: “Alex Mashinsky once promised New Yorkers that his company was a safe place for their hard-earned savings, but when his high-risk investments collapsed, they lost everything.”
Mashinsky Other penalties faced
After admitting to fraud charges, Mashinsky was sentenced to 12 years in federal prison in May 2025. The prosecution had previously sought a 20-year prison term. He was also ordered to pay back more than $48 million.
He was arrested in July 2023 and released on bail of $40 million before the trial.
The Commodity Futures Trading Commission (CFTC) of the United States has permanently banned Mashinsky from trading; it has also reached a settlement of $10 million with the Federal Trade Commission (FTC) and been prohibited from entering the cryptocurrency industry.
According to the Office of the Attorney General, as of August 2026, Celsius creditors have received over $3.4 billion through the company's bankruptcy proceedings. Mashinsky has waived all its claims to these bankruptcy distributions.
