Cryptoupdated 54m ago3 min read
Letitia James Secures Up To $35M From Alex Mashinsky, Bans Him For Life
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New York AG settlement imposes up to $35 million in conditional payments. Mashinsky receives lifetime ban from crypto, securities, and commodities industries.
NY settlement targets Mashinsky
New York Attorney General Letitia James secured up to $35 million from former Celsius CEO Alex Mashinsky and imposed a lifetime ban on his participation in the securities, commodities and cryptocurrency industries, her officesaidon October 9, 2026. The settlement ties the $35 million to conditional payments, with a larger leg of $25 million to New York payable if Mashinsky fails to forfeit $10 million in ill-gotten gains to the federal government, and a smaller leg of $10 million to New York payable if he does not serve his full prison sentence. The agreement resolves James’s 2023 civil case alleging Mashinsky misled hundreds of thousands of investors, including more than 26,000 of them in New York, about Celsius’s safety to pull billions of digital assets onto the platform.
Mashinsky is currently serving a 12-year prison sentence from the parallel federal criminal case, and the federal case ordered him to forfeit more than $48 million to the federal government. Celsius investors and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August 2026, according to the settlement description.
Conditional payments hinge on forfeiture
James said, “I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers,” as the settlement framed the ban as the part that matters going forward. Under the New York settlement, Mashinsky must pay the state $25 million if he does not forfeit $10 million in ill-gotten gains to the federal government, and he must pay a further $10 million if he fails to serve his full prison sentence. The state’s claim is a fallback, saying the larger leg of $25 million would only pay if Mashinsky fails to forfeit $10 million, and the smaller leg of $10 million would only pay if he does not serve his full prison sentence.
The OAG release does not say whether the $25 million payment and the federal forfeiture are sequential, alternative or overlapping, and it said no settlement agreement, stipulation or court filing was read alongside it. Celsius froze customer withdrawals in June 2022 and filed for bankruptcy a month later, and the attorney general’s office described the settlement as resolving claims that Mashinsky misled hundreds of thousands of investors about the safety of Celsius deposits.
Ban adds to other enforcement
The settlement permanently bars Mashinsky from working in the securities, commodities and cryptocurrency industries, and it adds state penalties to the federal fraud conviction and the 12-year prison sentence he is already serving. Mashinsky was also permanently barred from commodities activity by the Commodity Futures Trading Commission in June, and Celsius customers and creditors have received more than $3.4 billion through bankruptcy proceedings as of August. Mashinsky’s payment conditions depend on forfeiture and prison time, and the criminal court mandates the sentence with the Bureau of Prisons overseeing its execution.
“The New York agreement ties $35 million in potential payments to forfeiture and prison conditions.”
Altcoin Buzz said the release places the case in a run of New York crypto actions handled by Senior Enforcement Counsel Tanya Trakht and Assistant Attorneys General Alejandra de Urioste and Gaia Mattiace of the Investor Protection Bureau. The settlement description also said the $35 million and the up to $35 million in this settlement are described separately from the $3.4 billion already distributed in the Celsius bankruptcy, and it said the release gives no mechanism that routes any part of the new money to creditors.