Alex Mashinsky, founder of Celsius Network, has agreed to a permanent ban from the crypto industry and will pay up to $35 million in a settlement with New York authorities. The financial component is contingent on compliance with federal forfeiture and prison-sentence conditions.
The industry ban prevents Mashinsky from participating in any capacity within the cryptocurrency sector, including management, operations, or advisory roles for any entity involved in digital assets.
The conditional payments are linked directly to outcomes of ongoing federal legal proceedings. Specific forfeiture amounts and potential prison-sentence terms will determine the final payout.
Celsius Network filed for Chapter 11 bankruptcy in July 2022 after freezing customer withdrawals in June 2022, impacting hundreds of thousands of users. Mashinsky resigned as CEO in September 2022.
Federal prosecutors charged Mashinsky with fraud, market manipulation, and wire fraud in July 2023, alleging he misrepresented Celsius's financial health and artificially inflated the price of the CEL token. The SEC filed a civil lawsuit against him in September 2023 for selling unregistered securities and making false statements about Celsius's business model and risk management. The CFTC also filed a civil enforcement action in July 2023, alleging fraud related to Celsius's unregistered commodity pool.
The New York settlement concludes a state-level action, but federal cases remain active. The FTC and CFTC previously placed limitations on Mashinsky's activities.
