New York Attorney General Letitia James announced on Friday that she obtained up to $35 million from ex-Celsius Chief Executive Officer Alex Mashinsky alongside a lifetime prohibition stopping him from participating in the securities, commodities, and digital asset sectors.
As outlined in a press release, James filed a lawsuit against Mashinsky in 2023, alleging that he deceived hundreds of thousands of participants, featuring over 26,000 residents of New York, regarding the security of their funds on Celsius.
Mashinsky is currently undergoing a 12-year prison term at the federal level subsequent to a guilty plea regarding fraud involving securities and commodities. Furthermore, the Commodity Futures Trading Commission permanently prohibited him from engaging in commodities operations last June.
Based on the terms of the New York agreement, Mashinsky is required to remit $25 million to the state in the event that he fails to surrender $10 million in unlawful profits to federal authorities. Additionally, he faces an extra $10 million penalty if he does not complete his entire prison sentence, according to statements from the attorney general’s department.
Celsius halted customer redemptions during June 2022 and sought Chapter 11 bankruptcy protection the following month.
The attorney general reported that individuals and lenders associated with Celsius have recovered in excess of $3.4 billion via the bankruptcy proceedings as of August. Upon exiting bankruptcy in 2024, the enterprise had intended to disburse approximately $3 billion worth of digital currencies and fiat, utilizing PayPal and Coinbase to handle the transactions.
James pointed out that Mashinsky falsely advertised Celsius as being more secure than traditional financial institutions while the platform deployed user funds into hazardous ventures and hid deficit figures. She emphasized that dishonest actors will not be permitted to exploit digital assets to target naive New Yorkers.
Originally published at https://www.coindesk.com/policy/2026/10/09/new-york-ag-secures-up-to-usd35-million-and-lifetime-crypto-ban-from-celsius-alex-mashinsky.
