New York permanently bars ex-Celsius chief Mashinsky from finance and crypto
Victoria Shinder2 min readNew York Attorney General Letitia James announced on 9 October a settlement with Alex Mashinsky, co-founder and former chief executive of the collapsed crypto lender Celsius Network. It imposes a permanent ban on his participation in the securities, commodities and cryptocurrency industries and secures up to $35 million in payments to the state — both conditional on how his separate federal criminal case plays out.
The case. The attorney general sued Mashinsky in 2023, alleging he defrauded hundreds of thousands of investors, including more than 26,000 New Yorkers, by misleading them about Celsius's safety to attract deposits. According to the office's investigation, he claimed Celsius was safer than a bank and made low-risk loans to reputable counterparties, while customer assets were routinely used in high-risk strategies whose losses he concealed. The suit also alleged he failed to register as a salesperson and as a securities and commodities dealer under New York law.
How the money works. The $35 million is not a straightforward payment:
- $25 million is owed to New York only if Mashinsky fails to forfeit $10 million in ill-gotten gains to the federal government under his plea agreement, in addition to assets already forfeited.
- A further $10 million is owed only if he does not serve his full prison sentence as mandated by the criminal court.
Mashinsky is serving 12 years in federal prison. In the federal case he was ordered to forfeit more than $48 million. The settlement itself does not create a new payout to Celsius creditors; the attorney general notes that more than $3.4 billion had been distributed to creditors in the bankruptcy as of August 2026, and that Celsius founders and executives separately paid $16.5 million to the Federal Trade Commission.
The ban. The attorney general describes it as permanent and covering the securities, commodities and crypto businesses. Coverage of the stipulation's text by CryptoSlate reports that it preserves an exception for Mashinsky's own personal purchases and sales, and that he admitted misleading investors about Celsius's regulatory approval and his own sales of the CEL token; the attorney general's release does not itself mention those details.
Why a ban matters for someone in prison. Industry bars outlast sentences. With early-release mechanisms common in the federal system, a permanent prohibition removes the option of returning to run or advise a financial business after release — and the $10 million clause puts a price on any shortening of the sentence. The release lists it alongside the office's other crypto cases, including a $5 million settlement with the platform Uphold in April 2026.
Source: New York State Attorney General, 9 October 2026 — https://ag.ny.gov/press-release/2026/attorney-general-james-bans-former-cryptocurrency-ceo-who-defrauded-investors