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Alex Mashinsky, the co-founder and former chief executive of Celsius Network, has agreed to a permanent ban from the cryptocurrency, securities and commodities industries as part of a New York settlement announced on Oct. 9, 2026, according to Crypto.news. The agreement carries up to $35 million in conditional payments, all of them tied to whether he follows through on federal forfeiture and serves his full prison term.
New York Attorney General Letitia James announced the deal, resolving her office’s 2023 civil lawsuit over how Mashinsky marketed Celsius as a safe place to deposit cryptocurrency. Crypto.news reported the state’s case involved hundreds of thousands of investors, more than 26,000 of whom were New Yorkers.
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Key facts
- Mashinsky owes New York $25 million if he does not surrender an additional $10 million in ill-gotten gains to the federal government, and a separate $10 million payment if he does not serve his full sentence.
- He is serving a 12-year federal prison term after pleading guilty in December 2024 to securities fraud and commodities fraud, with a federal order to forfeit more than $48 million.
- Celsius creditors had received more than $3.4 billion through bankruptcy distributions by August 2026, per the attorney general’s office.
- News.bitcoin reported that the New York settlement, filed Oct. 8 and announced Oct. 9, binds Mashinsky personally and has no stated geographic limit, while exempting his personal purchases and sales.
- Blockchainreporter reported that Celsius founders and executives were required to pay $16.5 million to the Federal Trade Commission to settle charges over deposit-safety claims.
Two conditions, two payments
The state’s money rests on events outside its control. The first condition is federal forfeiture: Mashinsky owes New York $25 million unless he turns over an additional $10 million to the U.S. Department of Justice, separate from assets already surrendered in the criminal case. News.bitcoin reported that qualifying payments made after May 20, 2025 count toward that requirement.
The second condition involves his sentence. A $10 million judgment against him is satisfied if he completes his prison term under the terms of the agreement; a reduced or overturned sentence, compassionate release, sentence credits, or certain early-release and home-confinement programs can trigger the payment. The Bureau of Prisons oversees his sentence, the attorney general’s office said. Blockchainreporter framed the $35 million as a ceiling rather than a guaranteed recovery.
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Scope of the ban and earlier federal orders
The lifetime restriction goes beyond executive roles. News.bitcoin reported it reaches investment advice, paid financial commentary, promotions, and work soliciting customers for digital asset businesses, and that the state court retains jurisdiction to enforce it, with violations pursuable through civil or criminal contempt. James’s office said the ban keeps Mashinsky from taking advantage of investors again.
The New York agreement does not displace earlier federal actions. According to the attorney general’s office, an April FTC consent order entered by U.S. District Judge Denise Cote permanently restricts his promotion and provision of asset-related services, carrying a $4.72 billion judgment with most of it suspended under payment and financial disclosure conditions, plus a $10 million payment that can be satisfied by a qualifying DOJ payment. A June federal consent order permanently barred him from trading in CFTC-regulated markets and from registering with the agency. Mashinsky has also sought to vacate his conviction and sentence, representing himself since May; prosecutors opposed the petition in August, calling his arguments without merit.
Why it matters
The settlement closes the state case but leaves the practical recovery largely contingent. Celsius froze customer withdrawals in June 2022 and filed for bankruptcy the following month, and the largest returns to creditors have come through the bankruptcy rather than through penalties. The ban, meanwhile, adds a state-level lifetime bar on top of the federal trading and asset-services restrictions already in place, and it applies wherever Mashinsky might seek crypto-related work.
How the money lands also depends on federal courts. Mashinsky’s objections to his conviction continue on a separate track from the settlement, and James’s office said the state agreed not to seek millions more unless federal forfeiture fails.
What to watch
Several court dates will determine whether the state ever collects. U.S. District Judge Paul Engelmayer signed a Sep. 29 order in the SEC’s civil case dismissing the action without prejudice after the parties reported a settlement in principle, giving them 90 days to seek reopening or submit the agreement for the court to keep enforcement authority. In the criminal matter, U.S. District Judge John Koeltl set Dec. 11 as Mashinsky’s deadline to respond to the government’s opposition to his petition, with an extension possible if needed. Federal forfeiture payments will decide the $25 million question.
This article is not financial advice, and the legal and market outcomes described here remain uncertain.
Sources: crypto.news, News.bitcoin, Blockchainreporter
