New York Attorney General Letitia James permanently bans former Celsius CEO Alex Mashinsky from the financial industry over investor fraud

New York – New York Attorney General Letitia James has secured a settlement worth up to $35 million against Alex Mashinsky, the former CEO and co-founder of cryptocurrency lending company Celsius Network LLC, permanently banning him from working in the securities, commodities, and cryptocurrency industries.

The agreement follows a lawsuit filed by James in 2023, accusing Mashinsky of misleading hundreds of thousands of investors about the safety of Celsius and the risks associated with depositing digital assets on the platform.

More than 26,000 New Yorkers were among those affected by the company’s activities, according to the Office of the Attorney General. Many investors lost substantial amounts of money when Celsius collapsed after making risky investments that Mashinsky allegedly concealed from customers.

Mashinsky, who is already serving a 12-year federal prison sentence in a separate criminal case, will now be permanently prohibited from participating in the financial industries covered by the New York settlement.

The agreement also establishes additional financial penalties tied to his compliance with the terms of his federal criminal case.

“Alex Mashinsky promised New Yorkers that his company was a secure place to invest their hard-earned savings, only to leave them penniless when his risky investments collapsed,” said Attorney General James. “I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers. We took action to hold Mashinsky accountable, and now we are barring him from the securities industry so he cannot take advantage of investors again.”

Celsius operated as a cryptocurrency lending platform that allowed customers to deposit digital currencies and earn returns on their holdings.

The company promoted its services as an opportunity for cryptocurrency owners to generate income from assets they already possessed. Investors were encouraged to transfer their digital funds to Celsius in exchange for promises of high yields.

Mashinsky played a central role in attracting customers.

As the company’s most recognizable representative, he frequently appeared in interviews, attended public events, and used social media to promote Celsius and explain its investment services.

His public statements were an important part of the company’s efforts to convince people that their cryptocurrency would be safe on the platform.

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However, an investigation conducted by the New York Attorney General’s Office found that Mashinsky repeatedly misrepresented how Celsius operated.

According to investigators, he provided misleading information about the company’s financial safety, its number of users, and the investment strategies used to generate returns.

He also regularly described Celsius as safer than a traditional bank.

That claim was particularly significant because Celsius did not operate under the same strict federal and state regulatory requirements that apply to banks.

Those differences meant that customers who deposited cryptocurrency with Celsius were exposed to risks that were not reflected in the company’s public messaging, according to the investigation.

Mashinsky also claimed that Celsius followed conservative investment practices and lent customers’ digital assets only to reliable and reputable organizations.

Investigators found a different situation.

The company routinely used investors’ cryptocurrency in high-risk financial strategies. Several of those investments resulted in substantial losses, which Mashinsky attempted to keep hidden from customers.

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Celsius ultimately lost hundreds of millions of dollars through risky investments before its collapse.

The consequences of Celsius’ failure extended far beyond the company’s executives and financial operations.

Many customers had placed significant portions of their savings into the platform after being assured that their investments were secure.

Some had committed money they had spent years accumulating.

The Attorney General’s Office highlighted the experiences of several New Yorkers whose financial situations were severely affected by the company’s collapse.

One resident mortgaged two properties to obtain money to invest with Celsius.

Another victim, a disabled veteran, lost $36,000 that had taken nearly 10 years to save.

These cases illustrate the financial consequences faced by individual investors who relied on the company’s promises.

For some customers, the losses represented years of savings rather than money they could easily replace.

The Attorney General’s Office said Celsius’ collapse left many investors financially devastated.

The investigation also found that Mashinsky failed to comply with New York registration requirements.

He had not registered as a salesperson for Celsius or as a securities and commodities dealer, despite conducting activities that required registration under state law.

These violations were included in the lawsuit James brought against him in 2023.

Under the newly announced agreement, Mashinsky faces financial obligations that depend on whether he meets certain conditions connected to his federal criminal case.

He must pay $25 million to New York if he fails to forfeit $10 million in illegally obtained gains to the federal government, in addition to assets already forfeited under his federal plea agreement.

A separate provision requires him to pay another $10 million to New York if he does not serve his full prison sentence as ordered by the criminal court and overseen by the Bureau of Prisons.

Together, those provisions could result in payments totaling $35 million.

The settlement does not mean that the entire amount is immediately due. The payments are conditional on the circumstances outlined in the agreement.

Mashinsky is currently serving a 12-year federal prison sentence following proceedings in a parallel criminal case.

In that case, he was also ordered to forfeit more than $48 million to the federal government.

Meanwhile, the Celsius bankruptcy process has resulted in significant distributions to creditors.

As of August 2026, more than $3.4 billion had been distributed to creditors through the company’s bankruptcy proceedings.

Separately, Celsius founders and executives were required to pay $16.5 million to the Federal Trade Commission.

The New York settlement adds a permanent professional restriction to the financial consequences Mashinsky already faces.

The ban prevents him from returning to business activities in the securities, commodities, and cryptocurrency industries covered by the agreement.

The action against Mashinsky is part of a broader series of cryptocurrency-related enforcement cases pursued by Attorney General James.

Her office has taken action against companies and individuals accused of misleading investors, promoting fraudulent investment opportunities, and operating illegal financial schemes.

In April 2026, James secured more than $5 million from cryptocurrency platform Uphold over its promotion of a fraudulent investment scheme operated by Cred, LLC.

The settlement followed allegations involving the platform’s role in promoting the investment opportunity.

In July 2025, her office also took action against a cryptocurrency scam targeting Russian-speaking residents of New York.

Earlier that year, in March, New York-based cryptocurrency firm Galaxy Digital agreed to a $200 million settlement over allegations that it fraudulently increased the price of Luna tokens.

Another enforcement action in January 2025 involved a different approach to notifying alleged cryptocurrency scammers about legal proceedings.

The Attorney General’s Office became the first regulator to provide notice of litigation by depositing a nonfungible token, commonly known as an NFT, into cryptocurrency wallets used by scammers.

That case involved a text-message scheme targeting vulnerable New Yorkers and stealing their digital assets.

In June 2024, James filed a lawsuit against cryptocurrency trading company NovaTechFx, accusing it of operating an illegal pyramid scheme.

The alleged scheme affected hundreds of thousands of investors worldwide, including more than 11,000 New Yorkers.

According to the lawsuit, investors were defrauded of cryptocurrency worth more than $1 billion.

These cases involved different companies and alleged misconduct, but each concerned the protection of investors participating in cryptocurrency markets.

The Attorney General’s Office has also encouraged people working within the cryptocurrency industry to report suspected fraud and other misconduct.

Employees or other individuals who have witnessed potentially illegal activities can submit whistleblower complaints directly to the office.

Complaints may be filed anonymously through the Attorney General’s official whistleblower portal.

The case against Mashinsky was handled by Senior Enforcement Counsel Tanya Trakht and Assistant Attorneys General Alejandra de Urioste and Gaia Mattiace of the Investor Protection Bureau.

They received assistance from Legal Assistant Charmaine Blake and Principal Accountant Shalendra Ramadhin, who also work within the bureau.

The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim.

The bureau operates within the Division for Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Meghan Faux.

With the latest settlement, Mashinsky faces a permanent ban from the covered financial industries alongside his existing federal prison sentence and forfeiture obligations.

For investors affected by Celsius, the bankruptcy proceedings have already returned billions of dollars to creditors, although the company’s collapse caused substantial financial losses.

The New York agreement closes another part of the legal proceedings against the former cryptocurrency executive while imposing restrictions intended to prevent him from participating in similar financial activities again.