On October 9, 2026, New York Attorney General Letitia James announced a settlement in New York Supreme Court case 450040/2023 that can require former Celsius CEO Alex Mashinsky to pay New York up to $35 million. The settlement also permanently bars Mashinsky from participating in the securities, commodities and cryptocurrency industries.
The order resolves the state case filed in 2023 over Mashinsky’s promotion and management of Celsius Network. New York alleged that he misled depositors about the platform’s safety while Celsius put customer assets into risky strategies and concealed losses. The Attorney General said the conduct affected hundreds of thousands of investors, including more than 26,000 in New York.
What the settlement requires
The headline amount is conditional. Under the settlement terms, Mashinsky must pay $25 million to New York if he fails to forfeit $10 million in ill-gotten gains to the federal government, in addition to assets already forfeited under his federal plea agreement.
A second condition concerns his prison term. Mashinsky must pay another $10 million to New York if he does not serve the full sentence imposed by the criminal court and overseen by the Bureau of Prisons. These two provisions produce the stated maximum of $35 million, but they do not establish that New York will collect that full amount. The final state payment depends on what happens with the federal forfeiture and sentence.
The permanent ban is not conditional. It prevents Mashinsky from doing business in the securities, commodities and cryptocurrency industries. That remedy reaches beyond Celsius and blocks him from returning to a role that involves selling, dealing in or operating within those markets.
Mashinsky is currently serving a 12-year federal prison sentence from a parallel criminal case. The Attorney General’s announcement says the federal court also ordered him to forfeit more than $48 million. The state settlement therefore sits beside the criminal sentence and federal forfeiture rather than replacing them.
The conduct behind the case
Celsius offered customers yields in exchange for depositing digital assets. Mashinsky was its co-founder, chief executive and principal public promoter. He appeared in interviews, at events and on social media to recruit users and present the platform as a safe destination for their funds.
The Office of the Attorney General said its investigation found misrepresentations about Celsius’s safety, user count and investment strategies. Mashinsky repeatedly described Celsius as safer than a bank, according to the office. The platform did not operate under the strict federal or state requirements that apply to banks.
The state’s account also distinguishes Celsius’s public description of its asset deployment from what the platform did. Mashinsky said Celsius made safe, low-risk investments and lent assets only to credible and reputable counterparties. The Attorney General said customer assets were routinely used in high-risk strategies, several of which generated losses that he concealed. Celsius lost hundreds of millions of dollars on risky investments before its collapse.
New York also alleged registration violations. Mashinsky did not register as a salesperson for Celsius or as a securities and commodities dealer, according to the Attorney General. Those failures formed a separate part of the state’s case from the alleged misrepresentations about risk and platform safety.
The state’s findings cover the full path from solicitation to loss. Mashinsky recruited depositors through public appearances and social media. He made claims about safety, user numbers and investment strategy while the company accepted their digital assets in return for promised yields. Celsius then used customer assets in strategies the Attorney General described as high risk. Several generated losses that Mashinsky concealed, according to the office. This sequence matters for lending-platform operators because the settlement addresses what customers were told, how their assets were deployed and whether the person making the pitch held the required registrations. The permanent ban applies to Mashinsky personally, while the monetary conditions are tied to obligations in his federal criminal case.
The release gives two examples of the losses borne by New York residents. One resident mortgaged two properties to invest through Celsius. A disabled veteran lost a $36,000 investment accumulated over nearly a decade. These examples show why the sales practices and risk claims mattered to depositors deciding whether to place savings on the platform.
Where creditor recoveries stand
The settlement announcement separates Mashinsky’s potential payments to New York from distributions made through the Celsius bankruptcy. Investors and creditors had received more than $3.4 billion in that proceeding, according to the Attorney General. The office said more than $3.4 billion had been distributed as of August 2026.
Celsius founders and executives were separately required to pay $16.5 million to the Federal Trade Commission. That payment, the bankruptcy distributions, federal forfeiture and New York settlement are distinct remedies described in the announcement. Readers tracking recoveries should not treat the maximum state payment as an addition already distributed to creditor accounts.
For operators, the settlement shows that state enforcement can attach personal restrictions to alleged misconduct at a crypto lending company. The remedy applies to Mashinsky across three industries and has no stated expiration date. Registration failures also remained part of the case even though the largest customer losses arose from the platform’s investment activity and collapse.
For creditors, the immediate reference point remains the bankruptcy distribution total rather than the contingent New York amount. The announcement does not say that money paid under the state contingencies will flow through the Celsius estate. It identifies New York as the payee under both conditions.
The unresolved figure is the amount Mashinsky will ultimately owe New York. It can range up to $35 million and depends on his federal forfeiture and completion of the 12-year sentence. The Attorney General did not provide a date for determining whether either contingent payment becomes due.
