Celsius Network founder Alex Mashinsky will pay $10 million and accept a lifetime ban from handling consumer assets to settle a civil fraud case with the U.S. Federal Trade Commission, closing another chapter in one of crypto’s most prominent enforcement actions.
"Celsius touted a new business model but engaged in an old-fashioned swindle," Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said of the initial complaint. The settlement, approved on April 28 by Judge Denise L. Cote in the Southern District of New York, resolves allegations that Mashinsky misrepresented the safety of the crypto lender, which collapsed in 2022.
The order imposes a monetary judgment of $4.72 billion, but suspends all but the $10 million payment, conditional on Mashinsky’s cooperation and accurate financial disclosures. The payment can be credited from the $48 million forfeiture ordered in his separate criminal case, where he was sentenced to 12 years in prison in May 2025 after pleading guilty to securities and commodities fraud.
For the 1.7 million customers who lost access to $4.7 billion in assets, the settlement provides a final, if partial, legal resolution against the firm’s former chief executive. The FTC’s action, coordinated with the Department of Justice, has established a regulatory blueprint for holding crypto executives personally accountable for corporate failures, even after bankruptcy proceedings are underway.
The core of the settlement is a permanent injunction that bars Mashinsky from advertising, offering, or participating in any business that allows for the deposit, exchange, investment, or withdrawal of assets. This effectively serves as a lifetime ban from the crypto and asset management industries.
The suspended $4.72 billion judgment acts as a financial deterrent. According to the court order, the FTC can move to enforce the full amount if Mashinsky is found to have misstated or concealed assets. This structure allows regulators to secure a substantial penalty on paper while acknowledging the practical limits of his ability to pay, ensuring his cooperation in ongoing proceedings.
The FTC’s original complaint, filed in July 2023, accused Mashinsky and co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein of deceiving users about the platform's risks. The agency alleged they falsely claimed Celsius was safer than a bank and held a non-existent $750 million insurance policy, all while using customer deposits for high-risk, uncollateralized loans. The civil case against Leon and Goldstein, who have not settled, continues.
The resolution of the FTC’s case against Mashinsky underscores a multi-agency strategy that has defined U.S. crypto enforcement since 2022. By pursuing parallel civil and criminal actions, regulators at the FTC, DOJ, SEC, and CFTC have created a framework for comprehensive accountability.
This approach ensures that even if a company declares bankruptcy, as Celsius did in July 2022, its executives remain liable for their actions. For other founders in the crypto space, the 12-year prison sentence combined with a permanent industry ban and financial penalties creates a stark precedent. The era of treating corporate collapse as a shield from personal liability appears to be over.
This article is for informational purposes only and does not constitute investment advice.
