Celsius Founder Mashinsky Banned From Crypto, Pays $10M

Alex Mashinsky, founder and former CEO of Celsius Network, reached a $10 million settlement with the Federal Trade Commission and has been permanently barred from working in the cryptocurrency industry under a federal court order.

The order prevents Mashinsky from advertising, marketing, promoting, offering or distributing, or helping others do so, any product or service that can be used to deposit, exchange, invest or withdraw assets, whether directly or through an intermediary.

The FTC had previously secured a $4.7 billion judgment tied to customer losses from Celsius’s collapse. Most of that judgment is suspended under the settlement. The suspended portion can be reinstated if the FTC asks the court and proves Mashinsky failed to disclose a material asset, misstated an asset’s value, or made material misstatements in financial disclosures.

The settlement also imposes reporting and record-keeping requirements on Mashinsky for up to 18 years and gives the FTC a path to recover additional funds if the court finds he misrepresented his finances.

Mashinsky is currently serving a 12-year federal prison sentence after pleading guilty in December 2024 to commodities fraud and to a scheme to manipulate the price of Celsius’s native CEL token.

Celsius froze customer withdrawals in 2022 and later filed for bankruptcy, leaving users unable to access billions of dollars in deposits. The FTC said its civil action was linked to those customer losses.

The agency’s enforcement against Mashinsky follows civil and criminal cases brought against founders and executives of other failed crypto lending platforms, including firms such as BlockFi and Genesis.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, called Celsius’s conduct “an old-fashioned swindle” in a statement issued in July 2023.