New Blow for Former Celsius CEO Serving 12-Year Sentence: Crypto Comeback Is Off the Table

The New York Attorney General’s Office announced that it had secured up to $35 million in recoveries and a permanent ban on former Celsius CEO Alex Mashinsky’s activities in the securities, commodities, and crypto industries as he serves a 12-year federal prison sentence.

The outcome, announced on October 9 by Attorney General Letitia James, stems from a 2023 lawsuit against the former executive of crypto lending platform Celsius. The Attorney General’s Office had alleged that Mashinsky misled hundreds of thousands of investors about the platform’s safety and investment strategies.

The lawsuit alleged that Celsius made risky investments, concealed the resulting losses, and gave customers the impression that their savings were safe. James said the new penalties aim to prevent Mashinsky from exploiting investors again.

Up to $35 million in recoveries and a permanent ban

The announced financial amount is up to $35 million. In addition, Mashinsky is permanently barred from participating in the securities, commodities, and crypto industries.

The new outcome is separate from payments made to Celsius creditors during the bankruptcy process. The company has paid its creditors more than $3.4 billion through that process.

New York ruling adds to federal bans

Mashinsky is currently serving a 12-year federal prison sentence and had previously faced penalties restricting his activities in the financial sector.

The Federal Trade Commission’s April settlement included a $10 million payment, an 18-year reporting obligation, and a ban on future activity in crypto and financial services. The settlement also included a $4.7 billion monetary judgment that was suspended.

The Commodity Futures Trading Commission had imposed permanent trading and registration bans in its June settlement. The ruling announced by New York adds the outcome of the state-level lawsuit to these federal penalties.