New York Attorney General Letitia James has secured a settlement of up to $35 million from former Celsius Network CEO Alex Mashinsky, resolving state fraud claims tied to the lender's collapse. The deal, announced October 8, 2026, also bars Mashinsky from trading securities or crypto — adding a New York penalty and a market ban to the 12-year federal prison sentence he is already serving.

The settlement closes one of the last open legal threads from one of crypto's most damaging failures. Celsius filed for Chapter 11 bankruptcy on July 13, 2022, freezing customer deposits, with losses during the proceedings topping $4.7 billion.

What does the settlement actually require?

The headline figure has two components. Mashinsky must pay $25 million in damages to New York State, plus a $10 million monetary judgment. His federal forfeiture obligations could reduce the second piece, which is why the state describes the total as "up to" $35 million.

The agreement also prohibits Mashinsky from participating in any trading of securities or crypto.

The case began as a civil complaint filed in 2023 under the Martin Act, New York's securities fraud statute, which gives the attorney general unusually wide enforcement reach and does not generally require proof of intent to defraud.

How did Celsius get here?

Celsius launched its Earn Interest Accounts program in 2018, pitching crypto deposits with yields above traditional savings products. The state's complaint alleged that Celsius and Mashinsky used deceptive practices that misled more than 26,000 New York investors.

The native CEL token sat at the center of the case. According to the complaint, Mashinsky sold 25 million CEL tokens worth $68.7 million without disclosing those sales while publicly promoting the token's value.

How does this fit the broader penalty record?

The New York settlement follows a sequence of state and federal actions:

• May 2025: 12-year prison sentence and $48,393,446 in forfeiture after a guilty plea to commodities and securities fraud
• June 2026: CFTC consent order imposing a permanent trading ban
• July 2026: FTC settlement of $10 million with a lifetime ban on promotional activity
• October 8, 2026: New York settlement of up to $35 million plus a securities and crypto trading prohibition

The overlap matters for enforcement economics. The $10 million state judgment may be offset against the federal forfeiture, meaning New York's recovery and the federal government's claim compete rather than stack.

What does this mean for Celsius customers?

For victims, the direct impact is limited. The state payment is a penalty against Mashinsky personally and does not flow into the bankruptcy estate. Even at the full $35 million, the amount is small against more than $4.7 billion in customer losses.

The case also illustrates how state enforcers operate alongside federal agencies. New York used the Martin Act to pursue claims on behalf of more than 26,000 residents on a separate track from the federal prosecution.

The timeline itself is a marker: more than four years elapsed between Celsius's July 2022 bankruptcy filing and the October 2026 state resolution. What remains unresolved is how the $10 million judgment interacts with Mashinsky's $48.4 million federal forfeiture — that determination will decide how much New York actually collects.