Ex-Celsius CEO Mashinsky to Pay New York Up to $35M, Banned for Life

New York Attorney General Letitia James on Friday, October 9, 2026, announced a settlement with Alex Mashinsky, co-founder and former CEO of collapsed crypto lender Celsius Network. Mashinsky will pay the state up to $35 million and is permanently barred from the securities, commodities and cryptocurrency industries. The deal resolves the lawsuit her office filed in 2023.

Details

The payments are structured as conditions, according to the attorney general's press release. If Mashinsky fails to forfeit $10 million in ill-gotten gains to the federal government, on top of assets already forfeited, he owes New York $25 million. If he does not serve his full prison sentence, he owes a further $10 million. That puts the maximum at $35 million.

The 2023 complaint accused Mashinsky of defrauding hundreds of thousands of investors, including more than 26,000 New Yorkers, by marketing Celsius as safer than a bank while the company put customer assets into risky strategies and hid its losses. The release cites a New York resident who mortgaged two properties to invest with Celsius and a disabled veteran who lost $36,000. "I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers," James said.

Celsius froze withdrawals in June 2022 and filed for bankruptcy about a month later. As of August 2026, customers and creditors had received more than $3.4 billion through the bankruptcy process, the attorney general's office says. Mashinsky is serving a 12-year federal sentence after pleading guilty to securities and commodities fraud; the Southern District of New York also ordered him to forfeit more than $48 million. As The Block notes, Mashinsky settled with the FTC in April 2026, and in June the CFTC imposed permanent trading and registration bans.

What it means for the market

The New York settlement closes the last major government case against Mashinsky and ends a four-year saga that, together with Three Arrows Capital and FTX, came to define the 2022 collapse of centralized crypto lenders. The precedent matters for the industry: a state authority secured a lifetime industry ban on top of a federal sentence and CFTC sanctions, meaning platform executives answer for promises to customers on several levels at once.

For BTC and ETH holders there is no direct price impact, but the case is another reminder of the gap between platform custody and self-custody, a topic back in focus after the Ledger reseller incident. Follow regulatory developments in the daily summary.