Permanent Industry Prohibition

New York Attorney General Letitia James announced a settlement that permanently bars Alex Mashinsky from any activities involving securities, commodities or cryptocurrency businesses. The restrictions apply to running, promoting or advising on such operations and extend to providing investment advice or soliciting customers for digital asset platforms. Mashinsky remains subject to these rules despite serving a prison sentence and having no stated geographic limits, with the court retaining authority to enforce the order through civil or criminal contempt proceedings.

The ban builds on earlier restrictions from the Federal Trade Commission and Commodity Futures Trading Commission. Mashinsky must confine any personal transactions to his own accounts and cannot participate in related marketing or promotions.

Financial Terms of the Settlement

The agreement ties potential payments to Mashinsky to outcomes in his existing federal case. New York will receive 25 million dollars if Mashinsky fails to forfeit an additional 10 million dollars to the U.S. Department of Justice under his plea agreement. A separate 10 million dollar payment to New York becomes due only if he does not complete his full prison term, subject to the conditions outlined in the order.

These conditions arise from Mashinsky’s May 2025 sentence of 12 years in prison for commodities and securities fraud. He was already ordered to forfeit 48 million dollars as part of that federal judgment. The New York settlement does not create an unconditional obligation and will not apply if the federal requirements are met in full.

Celsius Network Collapse and Creditor Recoveries

Celsius Network, the crypto lending platform co-founded by Mashinsky, collapsed in June 2022 when withdrawals were halted and the company filed for bankruptcy protection. At the time, customers had approximately 4.7 billion dollars in crypto assets deposited. Distributions to creditors began after the company emerged from bankruptcy in January 2024, with more than 3.4 billion dollars returned to affected customers through August 2026.

The platform operated without full regulatory oversight for banks or securities entities. Mashinsky had repeatedly described Celsius as a safe, bank-like investment option while directing funds into high-risk ventures whose losses were not disclosed to depositors.

Allegations in the New York Lawsuit

The New York Attorney General’s office filed the lawsuit against Mashinsky in January 2023, accusing him of defrauding hundreds of thousands of investors, including more than 26,000 New Yorkers. Prosecutors alleged that Mashinsky misled customers by claiming Celsius assets were protected like bank deposits, failed to register in required securities and commodities roles and concealed the risks of investments that produced substantial losses.

One affected New York resident mortgaged two properties to participate, while another, a disabled veteran, lost 36,000 dollars saved over nearly a decade. The settlement resolves the civil claims and includes an admission of violations under New York’s Martin Act and Executive Law section 63(12).

Additional Regulatory Actions

Mashinsky already faces a lifetime trading and registration ban from the Commodity Futures Trading Commission, imposed after his guilty plea and effective since June 2025. The Federal Trade Commission had previously entered a settlement requiring him to pay 10 million dollars and imposed a reporting regime while barring him from certain financial services. These prior orders remain in effect and are not affected by the new New York agreement.

Mashinsky is currently serving his federal sentence and has been ordered to forfeit the full 48 million dollars already imposed. No additional payments to New York are required if he meets those federal obligations and serves the complete term.