New York Attorney General Secures Up to $35M From Mashinsky, Bans Him for Life

New York Attorney General Letitia James secured up to $35 million from Alex Mashinsky, a co-founder and former chief executive of Celsius Network, plus a permanent ban on his participation in the securities, commodities and cryptocurrency industries, her office said on October 9, 2026.

Look past the headline number. Almost none of the $35 million is cash Mashinsky owes today. The figure is the sum of two conditional payments, and both fire only if his federal case turns out a particular way.

The Two Payments Behind the $35 Million

The larger leg is $25 million to New York, payable if Mashinsky fails to forfeit $10 million in ill-gotten gains to the federal government, on top of assets already forfeited under his federal plea agreement.

The smaller leg is $10 million to New York, payable if he does not serve his full prison sentence, as mandated by the criminal court and overseen by the Bureau of Prisons.

So the state's claim is a fallback. If the federal forfeiture is satisfied and the sentence runs to term, both conditions fail and New York collects nothing under those clauses. The OAG release does not say whether the $25 million payment and the federal forfeiture are sequential, alternative or overlapping, and no settlement agreement, stipulation or court filing was read alongside it.

What the State Says He Did

The OAG sued Mashinsky in 2023 over the way Celsius recruited deposits. The state alleged he defrauded hundreds of thousands of investors, more than 26,000 of them in New York, by misleading them about the platform's safety to pull billions in digital assets onto it. He also failed to register as a salesperson for Celsius and as a securities and commodities dealer, the state alleged.

An investigation by the office found he deceived investors about Celsius' safety, its number of users and its investment strategies, and repeatedly claimed it was safer than a bank. Customer assets, the release says, were routinely used in high-risk strategies, many of them losing money that Mashinsky concealed.

Mashinsky is currently serving a 12-year prison sentence from the parallel federal criminal case. In that case he was ordered to forfeit more than $48 million to the federal government, and Celsius investors and creditors have received more than $3.4 billion through the bankruptcy proceeding as of August 2026. Celsius founders and executives were separately forced to pay $16.5 million to the Federal Trade Commission.

At least one aggregation of the release put the federal forfeiture at over $480 million. The OAG release says more than $48 million, and that is the figure it attaches to the case.

The office framed the ban as the part that matters going forward.

I will not allow scammers to use cryptocurrencies to prey on unsuspecting New Yorkers. We took action to hold Mashinsky accountable, and now we are barring him from the securities industry so he cannot take advantage of investors again.

Where the Settlement Money Does Not Go

The $3.4 billion already distributed in the Celsius bankruptcy and the up to $35 million in this settlement are described separately, and the release gives no mechanism that routes any part of the new money to creditors. It also does not say whether a New York payment would go to a victims fund or to the state treasury.

On the record available, this is a state revenue claim paired with a federal forfeiture, not a creditor recovery. Anyone holding a Celsius claim should not read the $35 million as a second distribution. The money that reached them was the bankruptcy pool, and the release states no link between the two.

A Wider Enforcement Record

The release places the case in a run of New York crypto actions:

• April 2026: James secured over $5 million from the crypto platform Uphold over its promotion of a fraudulent investment scheme run by Cred, LLC.
• March 2025: Galaxy Digital, a New York-based crypto firm, agreed to a $200 million settlement over the office's claims that it fraudulently pumped the price of Luna tokens.
• Ongoing: the office is asking crypto industry workers who witnessed misconduct or fraud to file a whistleblower complaint, which can be done anonymously.

The case was handled by Senior Enforcement Counsel Tanya Trakht and Assistant Attorneys General Alejandra de Urioste and Gaia Mattiace of the Investor Protection Bureau.

The number to watch is not $35 million. It is whether the $10 million federal forfeiture is met and whether Mashinsky serves the full 12 years, because only a miss on one of those turns a conditional state claim into cash. The release carries no case number or docket link, so the federal docket is where those two conditions will show up first.