New York Attorney General Letitia James has banned Celsius Network founder Alex Mashinsky for life as part of a $35 million settlement, according to a report published by COINOTAG on October 9, 2026. The agreement resolves claims tied to the 2022 collapse of the crypto lender, whose native token trades under the ticker CEL. The outcome closes a civil case that James's office filed in January 2023, and it arrives alongside parallel resolutions in separate federal proceedings over the same collapse.

Celsius was once among the largest cryptocurrency lending and interest-earning platforms, holding billions of dollars in customer assets at its peak. The company froze customer withdrawals in June 2022, citing extreme market conditions, and filed for Chapter 11 bankruptcy protection the following month — the court-supervised restructuring process companies use to address debts while reorganizing. The freeze and filing came during a 2022 downturn in which several other major crypto lenders also halted withdrawals or sought bankruptcy protection. The New York Attorney General's office subsequently sued Mashinsky and Celsius in January 2023, alleging misleading statements about the platform's financial condition and misconduct involving the CEL token.

Update — 21:51 UTC: The separate civil case brought by the U.S. Securities and Exchange Commission is now closer to resolution than the article's earlier status suggested. U.S. District Judge Paul Engelmayer signed a September 29 order dismissing the action without prejudice after the parties reported a settlement in principle, with 90 days to submit the agreement to the court. A dismissal without prejudice allows the case to be brought again if the settlement is not finalized. Whether the agreement is submitted within that window is the next procedural milestone to watch in the federal case.

Mashinsky also faces a criminal case: he was arrested in July 2024 on federal fraud charges and pleaded guilty in December 2024 to securities fraud and commodities fraud. With the state ban and payment now in place, the SEC's settlement in principle pending submission, and the criminal plea entered, the Celsius founder's exposure from the 2022 collapse is being resolved across separate state, federal civil, and criminal channels.

This article was first published on COINOTAG: Letitia James Bans Celsius (CEL) Founder Mashinsky for Life in $35 Million Settlement