NY AG Wins Up to $35M, Lifetime Ban Against Mashinsky

New York's attorney general has secured up to $35 million in conditional payments and a lifetime ban from the securities, commodities and cryptocurrency industries against Alex Mashinsky, the former CEO of collapsed crypto lender Celsius Network. The $35 million is not a flat bill: under the settlement announced Friday, New York collects some or all of that sum only if Mashinsky fails to meet separate conditions tied to his federal criminal case.

What New York actually won

New York Attorney General Letitia James's office announced it secured up to $35 million from Mashinsky and a permanent ban on his participation in the securities, commodities and cryptocurrency industries, according to the office's press release. The settlement resolves a civil case James's office filed in January 2023, in which it accused Mashinsky of defrauding hundreds of thousands of investors, including more than 26,000 in New York, by misleading them about Celsius's safety to get them to deposit digital assets on the platform, the attorney general's office said.

The office's investigation found that Celsius lost hundreds of millions of dollars on risky investments that Mashinsky tried to hide from investors, and that he also failed to register as a salesperson or as a securities and commodities dealer under New York law, according to the press release.

The money is structured as a conditional penalty rather than an outright fine. Under the settlement, Mashinsky must pay $25 million to New York if he fails to forfeit an additional $10 million in ill-gotten gains to the federal government, on top of assets he has already forfeited under his federal plea agreement, the attorney general's office said. TokenPost, which reviewed the underlying court filing, reported that this $25 million damages obligation can instead be satisfied through a $10 million payment to the U.S. Department of Justice under Mashinsky's existing federal forfeiture order. A separate, independent $10 million judgment applies if Mashinsky does not serve his full prison sentence, and according to TokenPost that judgment can be satisfied once he completes his term, subject to the order's conditions. TokenPost also reported the consent judgment itself was filed on October 8, one day before the public announcement.

Beyond the money, the order imposes a lifetime occupational bar. Under its terms, Mashinsky is prohibited, aside from personal transactions, from issuing, selling, promoting, managing or advising on securities, commodities, cryptocurrency or digital assets, TokenPost reported. "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," Attorney General James said in the announcement.

How this stacks on top of his other penalties

New York's action is the latest in a series of separate proceedings against Mashinsky stemming from Celsius's 2022 collapse, and none of these penalties replace or offset one another except where a settlement explicitly says so. On the criminal side, Mashinsky received a 12-year prison sentence for misappropriating Celsius customers' funds and manipulating the price of the platform's token, CEL, Decrypt reported, after he pleaded guilty in December 2024 to one count of commodities fraud and one count of securities fraud. As part of that case, he was also ordered to forfeit more than $48 million to the federal government, according to the New York attorney general's office.

Federal regulators acted separately from both the criminal case and New York's lawsuit. He was permanently barred from commodities activity by the Commodity Futures Trading Commission in June, CoinDesk reported. Earlier, in April, the Federal Trade Commission reached a settlement with Mashinsky that included a suspended $4.7 billion judgment, a $10 million payment and an 18-year reporting requirement, and that also bars him from future involvement in the cryptocurrency and financial-services industries, according to The Block. New York's $35 million ceiling and lifetime ban add to these federal outcomes; they don't substitute for them.

One pending legal question could still affect New York's third payment condition. Mashinsky has filed a motion in the Southern District of New York seeking to vacate his 12-year sentence, Yahoo Finance reported. No ruling on that motion had been reported as of this settlement's announcement. Because New York's $10 million penalty is triggered specifically by whether Mashinsky "serves his full prison sentence," the outcome of that pending motion bears directly on whether New York ever collects that portion of the judgment.

Where creditor recovery stands, separately

The New York penalty is distinct from what Celsius customers have already recovered through the company's bankruptcy, which runs through its own separate accounting. More than $3.4 billion had been distributed to creditors in the bankruptcy as of August 2026, according to the attorney general's office. That figure reflects bankruptcy-estate distributions to Celsius account holders generally; it is not money from this settlement, which is payable to the state rather than directly to depositors. The attorney general's office also noted a separate, earlier action in which Celsius founders and executives paid $16.5 million to the Federal Trade Commission.

What this means for readers

For former Celsius depositors, this settlement doesn't create a new claims process; it is a civil penalty payable to New York State, and its ultimate size depends on conditions outside depositors' control. Readers following crypto enforcement should avoid adding these dollar figures into a single "total Mashinsky owes" number: the $25 million New York payment disappears entirely if the $10 million federal forfeiture condition is met, and the federal forfeiture, CFTC ban, FTC settlement and New York judgment are four separate legal actions with their own terms rather than components of one combined penalty. What remains genuinely unresolved is the pending motion to vacate the federal sentence, which bears directly on one of the three conditions in the New York judgment, and for which no court ruling or schedule has been reported.