New York Attorney General Letitia James secured a settlement worth up to $35 million from former Celsius CEO Alex Mashinsky and barred him permanently from the securities, commodities and cryptocurrency industries, her office announced Friday.

What did the state allege?

James sued Mashinsky in 2023, according to the attorney general's press release, accusing him of misleading hundreds of thousands of investors — including more than 26,000 New Yorkers — about the safety of their Celsius deposits. He had promoted the crypto lender as safer than a bank while the company deployed customer assets in risky strategies and concealed losses, James alleged.

"I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers," James said Friday.

What does the settlement require?

Under the agreement, Mashinsky must pay New York $25 million if he does not forfeit $10 million in ill-gotten gains to the federal government. He owes an additional $10 million if he fails to serve his full prison sentence, the attorney general's office said. The lifetime ban covers all activity in the securities, commodities and cryptocurrency industries, mirroring a similar prohibition the Commodity Futures Trading Commission imposed in June.

How does this connect to the federal case?

Mashinsky is serving a 12-year federal prison term after pleading guilty to securities and commodities fraud. The New York settlement stacks civil liability on top of that criminal conviction, allowing the state to recover funds regardless of how federal forfeiture plays out.

What happened to Celsius customers?

Celsius froze customer withdrawals in June 2022 and filed for bankruptcy a month later. The attorney general's office said creditors have since received more than $3.4 billion through bankruptcy proceedings as of August. The company had previously planned to distribute roughly $3 billion in crypto and cash when it emerged from bankruptcy in 2024, routing payments through Coinbase and PayPal.

What enforcement gaps remain?

The settlement closes New York's civil action against Mashinsky but does not extend to other former Celsius executives or to the bankruptcy estate's separate litigation tracks. State regulators continue to use fraud statutes and Martin Act powers against crypto lending platforms whose principal officers have moved on, and the Mashinsky order sets a template for permanent industry bans tied to retail-customer losses.

The lifetime prohibition takes effect immediately, and any breach would expose Mashinsky to contempt proceedings in New York state court.