New York AG Reaches Settlement with Celsius' Alex Mashinsky, Securing $35 Million
Written with artificial intelligence.
New York Attorney General Letitia James has settled a civil case with former Celsius CEO Alex Mashinsky, resulting in a payment of up to $35 million and a lifetime ban from the finance industry. This follows Mashinsky's conviction for fraud related to misleading investors about the safety of their deposits.
Settlement Details
New York Attorney General Letitia James announced that a settlement has been reached with Alex Mashinsky, the former CEO of Celsius, who is currently serving a 12-year prison sentence for securities and commodities fraud. The settlement includes a payment of up to $35 million and a permanent ban prohibiting Mashinsky from engaging in any securities, commodities, or cryptocurrency activities.
Background on the Case
James filed the civil suit against Mashinsky in 2023, accusing him of misleading hundreds of thousands of investors—over 26,000 of whom reside in New York—about the safety of their deposits with Celsius. The company halted customer withdrawals in June 2022 and subsequently filed for bankruptcy a month later.
Financial Implications
As part of the settlement, Mashinsky is required to pay the state $25 million unless he forfeits $10 million to the federal government. If he fails to complete his prison sentence, he will owe an additional $10 million. As of August, Celsius has distributed more than $3.4 billion to its customers and creditors during the bankruptcy proceedings, with plans to distribute approximately $3 billion upon emerging from bankruptcy in 2024.
Statements from the Attorney General
Attorney General James emphasized that Mashinsky had falsely represented Celsius as a safer alternative to banks while engaging in risky financial practices that ultimately concealed significant losses from customers. She stated, "I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers."