Former Celsius CEO Alex Mashinsky has been permanently barred from the cryptocurrency, securities, and commodities industries under a settlement with New York Attorney General Letitia James that includes up to $35 million in conditional payments.

The agreement, announced Friday, resolves a 2023 civil lawsuit that accused Mashinsky of misleading hundreds of thousands of investors about the safety of Celsius before the platform's collapse in 2022. Celsius's failure was among the most prominent crypto lender collapses of 2022, a wave of platform insolvencies that brought heightened regulatory scrutiny to the digital asset lending sector.

Under the settlement's terms, Mashinsky must pay New York $25 million if he fails to forfeit an additional $10 million in ill-gotten gains to the federal government beyond assets already forfeited. He owes another $10 million if he does not serve his full prison sentence. In effect, the full $35 million becomes payable only if Mashinsky fails to meet those federal obligations.

Mashinsky is currently serving a 12-year federal prison sentence for fraud and was separately ordered to forfeit more than $48 million. The sentence stems from his December 2024 guilty plea to securities and commodities fraud.

"Alex Mashinsky promised New Yorkers that his company was a secure place to invest their hard-earned savings, only to leave them penniless when his risky investments collapsed," James said in Friday's announcement.

High Yields Preceded Celsius Collapse

According to the 2023 lawsuit, Mashinsky promoted Celsius as a safer alternative to banks, offering yields as high as 17% while allegedly concealing risky investments and mounting losses. The yield-driven model was a defining feature of the crypto lending sector, which expanded rapidly through 2021 and came under acute pressure when market conditions turned in 2022.

By early 2022, Celsius had attracted roughly $20 billion in digital assets, but the company struggled to generate enough revenue to sustain its promised returns, prompting increasingly risky investments, according to the Commodity Futures Trading Commission (CFTC), which filed fraud charges against Mashinsky and Celsius Network in July 2023.

Celsius froze customer withdrawals in June 2022 and filed for bankruptcy the following month, disclosing a shortfall of more than $1 billion between its assets and liabilities.

As of August 2026, more than $3.4 billion had been distributed to Celsius creditors through the bankruptcy proceedings, according to the New York Attorney General's Office.

Previous Federal Settlements and Ongoing Legal Challenges

The New York agreement follows separate settlements with federal regulators earlier this year. In June, the CFTC permanently barred Mashinsky from trading and registering with the agency. An April settlement with the Federal Trade Commission had already barred him from working in crypto and finance and required a $10 million payment, along with a largely suspended $4.72 billion judgment.

The Securities and Exchange Commission (SEC) also reached an agreement in principle with Mashinsky in September to settle its separate civil lawsuit, which a federal judge dismissed without prejudice on Sept. 29 pending finalization of the settlement.

Since May, Mashinsky has been seeking to vacate his federal conviction and sentence, representing himself in the proceedings. Federal prosecutors opposed his motion in August, calling his arguments "without merit."

A judge denied his request for discovery, and an Oct. 5 order left that decision unchanged. Mashinsky has until Dec. 11 to respond to the government's opposition to petition. Attention now turns to whether the SEC settlement is finalized as agreed in principle and how the court resolves his bid to vacate the conviction.