Alex Mashinsky, already serving 12 years for fraud, settled New York’s civil case over claims he misled Celsius customers about the failed crypto lender’s safety.

• New York Attorney General Letitia James said Friday she secured up to $35 million from former Celsius CEO Alex Mashinsky and permanently barred him from the securities, commodities and cryptocurrency industries.
• Mashinsky, who is serving a 12-year federal prison sentence for securities and commodities fraud, was accused of misleading hundreds of thousands of investors about the safety of Celsius deposits.
• Celsius customers and creditors have received more than $3.4 billion through bankruptcy proceedings after the cryptocurrency lender froze withdrawals and filed for bankruptcy in 2022.

New York Attorney General Letitia James said Friday she secured up to $35 million from former Celsius CEO Alex Mashinsky and a permanent ban preventing him from working in the securities, commodities or cryptocurrency industries.

James sued Mashinsky in 2023 according to a press release, saying he misled hundreds of thousands of investors, including more than 26,000 New Yorkers, about the safety of their Celsius deposits.

Mashinsky is serving a 12-year federal prison sentence after pleading guilty to securities and commodities fraud. He was also permanently barred from commodities activity by the Commodity Futures Trading Commission (CFTC) in June.

Under the New York settlement, Mashinsky must pay the state $25 million if he does not forfeit $10 million in ill-gotten gains to the federal government. He must pay a further $10 million if he fails to serve his full prison sentence, according to the attorney general’s office.

Celsius froze customer withdrawals in June 2022 and filed for bankruptcy a month later.

Celsius customers and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August, the attorney general said. The company had planned to distribute roughly $3 billion in crypto and cash when it emerged from bankruptcy in 2024, using Coinbase and PayPal for payments.

James said Mashinsky had promoted Celsius as safer than a bank while the company used customer assets in risky strategies and concealed losses. “I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers,” she said.

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