Celsius Founder Hit With $35M Penalty and Lifetime Crypto Ban

The founder of failed crypto company Celsius is facing even more trouble. New York's top lawyer has secured a major penalty against Alex Mashinsky, the former CEO (chief executive officer, the top boss of a company).

New York Attorney General (the state's chief legal officer, who can sue people on behalf of the public) Letitia James announced on Friday that she secured up to $35 million from Mashinsky. She also permanently banned him from working in the securities (investments like stocks and bonds), commodities (goods like gold or oil that are traded), and cryptocurrency (digital money like Bitcoin) industries.

What did Mashinsky do wrong? He was accused of lying to hundreds of thousands of customers — including over 26,000 New Yorkers — about how safe their money was. Celsius was a crypto lender (a company that let people deposit their crypto and earn interest, like a bank). Mashinsky promoted it as *safer than a bank*, but behind the scenes the company used customers' money in risky ways and hid its losses.

In 2022, Celsius froze all withdrawals (meaning customers couldn't take their money out) and filed for bankruptcy (a legal process when a company can't pay its debts).

Key facts to know:

• Mashinsky is already serving a 12-year federal prison sentence after pleading guilty to fraud.
• He must pay New York $25 million if he doesn't hand over $10 million in illegal gains to the federal government.
• He must pay an extra $10 million if he fails to serve his full prison term.
• Celsius customers have received more than $3.4 billion back through the bankruptcy process.

The bottom line: This settlement adds to the consequences Mashinsky already faces. For everyday investors, it's a reminder that promises of "safer than a bank" in crypto can be dangerous — and that regulators are increasingly holding crypto bosses accountable.

This is an AI-generated summary. Read the original article at: https://www.coindesk.com/policy/2026/10/09/new-york-ag-secures-up-to-usd35-million-and-lifetime-crypto-ban-from-celsius-alex-mashinsky