Former Celsius CEO Alex Mashinsky agreed to a permanent ban from the securities, commodities and cryptocurrency industries and up to $35 million in payments to New York. The money depends on his federal forfeiture and prison sentence. The deal adds to earlier FTC and CFTC bans.
New York Attorney General Letitia James said Friday she secured up to $35 million from former Celsius CEO Alex Mashinsky, along with a permanent ban from working in the securities, commodities or cryptocurrency industries. Mashinsky is serving a 12-year federal prison sentence after pleading guilty to securities and commodities fraud.
How the payments work
The money comes in two parts. The state's $25 million in damages is satisfied if Mashinsky pays $10 million to the Department of Justice under his federal forfeiture order. If he misses that requirement, the entire $25 million becomes due to the attorney general's office.
A separate $10 million judgment is payable if he does not serve his full sentence, according to The Defiant's reading of the attorney general's announcement.
What James said Mashinsky did
James sued Mashinsky in 2023, saying he misled hundreds of thousands of investors, including more than 26,000 New Yorkers, about the safety of their Celsius deposits. Mashinsky also admitted violating New York's Martin Act and Executive Law through false or materially misleading statements and omissions about Celsius's regulatory approval and his own sales of CEL tokens.
According to The Block, James said: "I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers".
Third ban after FTC and CFTC actions
The New York deal follows two federal actions. In April, the Federal Trade Commission settled with Mashinsky for a suspended $4.7 billion judgment, a $10 million payment and an 18-year reporting requirement. The Commodity Futures Trading Commission permanently barred him from commodities activity in June.
Celsius froze customer withdrawals in June 2022 and filed for bankruptcy a month later. Celsius customers and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August, the attorney general said.
Sources: CoinDesk, The Block, The Defiant
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