Alex Mashinsky, the founder of the bankrupt crypto lender Celsius, has agreed to a permanent ban from the securities, commodities, and cryptocurrency industries under a settlement announced by New York authorities on Oct. 9.
The settlement includes conditional payment obligations of up to $35 million for the state, which does not establish any new payouts to Celsius creditors.
This agreement resolves New York’s civil lawsuit, which was filed in January 2023, and introduces state obligations alongside a separate federal criminal case. Mashinsky is currently serving a 12-year prison sentence related to the federal case.
Understanding the $35 Million Settlement Structure
The first component of the settlement is a $25 million damages obligation to New York. However, under the terms of the consent order, this is considered satisfied if Mashinsky makes a qualifying $10 million payment to the U.S. Department of Justice as specified in his federal forfeiture order.
Payments made to the Department of Justice after May 20, 2025, can count dollar-for-dollar toward the $10 million requirement. If this specific payment is not made, New York’s Attorney General is entitled to the full $25 million.
The second obligation is a separate $10 million monetary judgment payable to New York. According to the agreement, this is deemed satisfied upon the completion of Mashinsky’s imprisonment under the federal judgment entered on May 12, 2025, subject to specific exceptions.
These exceptions include scenarios where his sentence is overturned or reduced by a court, such as through a Section 2255 challenge. The clause also accounts for compassionate release, good-time credits, earned-time credits, early release under the First Step Act, and home confinement through a Bureau of Prisons program.
In addition to the financial penalties, New York describes the industry ban as permanent. The restrictions apply to securities and commodities businesses, including the cryptocurrency sector, and cover roles such as broker, investment adviser, manager, officer, and consultant. The agreement also prohibits the distribution of investment advice for compensation or economic benefit.
Notably, the terms include an exception allowing Mashinsky to make his own personal cryptocurrency purchases or sales. The stipulation also documents his admission to misleading investors regarding Celsius’s regulatory approval and his personal sales of the company’s CEL token.
The court sentenced Mashinsky on May 8, 2025, and the stipulation records a federal forfeiture order totaling $48.4 million.
According to the New York Attorney General, Celsius has distributed over $3.4 billion to creditors as of August 2026. While qualifying Department of Justice payments would satisfy one of the settlement conditions, they would not establish another creditor distribution.