New York AG secures up to $35 million from former Celsius CEO Alex Mashinsky

New York Attorney General Letitia James secured up to $35 million from former Celsius Network CEO Alex Mashinsky and a permanent ban on his participation in the securities, commodities and cryptocurrency industries over allegations that he defrauded investors, her office announced Friday.

James sued Mashinsky in 2023, accusing him of misleading hundreds of thousands of investors about the crypto lending platform’s safety and investment strategies as Celsius took on risky investments and concealed losses.

Mashinsky is currently serving a 12-year federal prison sentence, while Celsius creditors have received more than $3.4 billion through the company’s bankruptcy proceedings.

"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," AG James said in a statement.

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. The settlement also bars him from future involvement in the cryptocurrency and financial services industries.

In June, the Commodity Futures Trading Commission also settled with the former Celsius CEO, barring Mashinsky from future anti-fraud violations and imposing permanent trading and registration bans.

"I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers," James continued. "We took action to hold Mashinsky accountable, and now we are barring him from the securities industry so he cannot take advantage of investors again."