Former Celsius chief executive Alex Mashinsky has reached a settlement with New York that could require him to pay up to $35 million and permanently prevent him from working in the securities, commodities or cryptocurrency industries.
The agreement resolves a civil case brought by New York Attorney General Letitia James, who alleged that Mashinsky misled hundreds of thousands of Celsius customers about the safety of keeping their assets with the crypto lender. The case involved more than 26,000 New York residents, according to the attorney general’s office and reporting from CoinDesk.
Mashinsky is already serving a 12-year federal prison sentence after pleading guilty to securities and commodities fraud. The New York settlement adds financial penalties and an industry ban to the consequences arising from the collapse of Celsius, which froze customer withdrawals in 2022 before entering bankruptcy.
Settlement adds financial penalties and industry ban
Under the agreement, Mashinsky must pay New York $25 million if he does not surrender $10 million in alleged ill-gotten gains to the federal government. He would also owe an additional $10 million if he fails to complete his full prison sentence.
The arrangement therefore exposes him to payments of up to $35 million, depending on whether the federal forfeiture takes place and whether he serves the entire sentence. It also bars him permanently from participating in the securities, commodities and cryptocurrency industries.
The settlement follows a lawsuit filed by James in 2023. Her office said Mashinsky represented Celsius as a safer alternative to a bank while the company allegedly used customer assets in risky strategies and concealed losses. James said the case demonstrated that cryptocurrency businesses could not avoid accountability when customers were harmed.
Mashinsky was also permanently barred from commodities activity by the U.S. Commodity Futures Trading Commission in June. That action followed his guilty plea and federal criminal case.
Celsius collapse left customers in bankruptcy proceedings
Celsius suspended customer withdrawals in June 2022, as the crypto market was under severe pressure. The lender filed for bankruptcy one month later, leaving customers and other creditors to seek recoveries through court-supervised proceedings.
New York’s attorney general said Celsius customers and creditors had received more than $3.4 billion through the bankruptcy process as of August. When Celsius emerged from bankruptcy in 2024, it had planned to distribute approximately $3 billion in cryptocurrency and cash, with Coinbase and PayPal used to facilitate payments.
The settlement with Mashinsky is separate from those bankruptcy distributions. It addresses the allegations against the company’s former chief executive, while the bankruptcy process concerns the distribution of available assets to customers and creditors.
The case also highlights the difference between a company’s marketing claims and the risks involved in crypto lending. A crypto lender may accept digital assets from customers and deploy them in other strategies, but unlike a traditional bank deposit, such arrangements can be exposed to sharp market movements, counterparty problems and restrictions on withdrawals. Those general risks became particularly significant when Celsius halted access to customer funds.
Moneyiar market picture
Moneyiar data at 11:34 a.m. on October 11, 2026, show declines over the past week for all four assets listed, even though two recorded small gains over the latest 24-hour period:
- Sky (SKY) was priced at $0.0768600652, down 0.7% over 24 hours and 16.5% over seven days.
- Artificial Superintelligence Alliance (FET) stood at $0.2260045928, down 0.12% in 24 hours and 2.98% over seven days.
- Ailey (ALE) traded at $0.2680201509, up 0.04% over 24 hours but down 0.57% over seven days.
- Comedian (BAN) was at $0.06100407, up 0.29% over 24 hours and down 8.26% over seven days.
These market figures describe price movements in the listed tokens and do not measure the financial recovery available to Celsius customers or the value of the settlement.
For former customers, the New York agreement is another legal development following Celsius’s failure. For regulators and investors, it reinforces the potential personal consequences for executives accused of making misleading statements about the safety of crypto products. Mashinsky’s criminal sentence, the CFTC ban and the New York settlement now form separate parts of the legal response to the collapse.
