Key Highlights
- Alex Mashinsky will pay $10 million to settle FTC charges over misleading Celsius customers about the safety of their funds.
- The three Celsius co-founders will pay a combined $16.5 million and face permanent restrictions on promoting certain crypto-related products.
- The settlement adds to Mashinsky’s legal troubles, following his 12-year prison sentence and lifetime ban from U.S. commodity markets.
Alex Mashinsky, the founder and former CEO of crypto lending platform Celsius Network, has agreed to pay $10 million to settle charges brought by the U.S. Federal Trade Commission (FTC). The move adds another chapter to the long legal battle that followed the company’s dramatic collapse in 2022.
According to the release, the settlement was approved by the U.S. District Court for the Southern District of New York and comes after the agency accused Mashinsky and two of his business partners of misleading customers about the safety of their money on the platform.
The FTC alleged that Mashinsky and Celsius co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein convinced customers that Celsius was a secure place to keep their crypto assets while making promises that did not match the company’s actual financial condition.
Under the settlement, the three executives will pay a combined $16.5 million. Mashinsky will pay $10 million, Leon $4.1 million, and Goldstein $2.4 million.
Executives face permanent business restrictions
The settlement also places restrictions on the executives’ future business activities. Mashinsky and Leon are permanently barred from marketing or selling products or services that allow customers to deposit, exchange, invest in, or withdraw assets.
Goldstein is also banned from marketing or selling retail products and services used to buy, sell, deposit, withdraw, distribute, or trade cryptocurrencies. In addition, all three are prohibited from making false or misleading claims about products or services.
Why the FTC took action against Celsius
The FTC’s case focused on the promises Celsius made to attract customers during its rapid growth. According to the regulator, the company repeatedly told users that their deposits were safe, that they could withdraw their funds whenever they wanted, and that Celsius had enough reserves to meet customer requests.
The company also claimed it had a $750 million insurance policy protecting customer deposits, advertised returns of up to 18% annual percentage yield through its Earn program, and said it did not make unsecured loans.
However, the FTC alleged that many of those statements were false. The agency said Celsius executives continued assuring customers that their funds were safe even in the days leading up to the company’s bankruptcy filing.
How Celsius’ collapse unfolded
The case traces back to the collapse of Celsius in July 2022. At its peak, the crypto lender managed billions of dollars in customer assets and became one of the largest firms in crypto lending. The company attracted users by offering high returns on crypto deposits and presenting itself as a safer alternative to traditional financial institutions.
As the crypto market weakened, however, Celsius froze customer withdrawals before filing for bankruptcy. Court filings later showed the company owed customers about $4.7 billion.
Settlement closes another major legal case
The FTC sued Celsius and its executives in July 2023, alleging that the company misled customers about the safety of its business and the risks behind its lending activities.
However, the settlement with Mashinsky, Leon, and Goldstein brings that civil case closer to an end while holding the former executives financially responsible for the agency’s allegations.
Mashinsky’s legal troubles continue
Mashinsky has also faced other legal consequences. In a separate criminal case, he pleaded guilty to commodities fraud and securities fraud in December 2024. He was later sentenced to 12 years in prison in May 2025 for misleading customers about Celsius’ profitability, investment risks, and the safety of customer funds.
But his legal issues did not stop there. The U.S. Commodity Futures Trading Commission (CFTC) also settled with Mashinsky last month, but it bans him from trading in U.S. commodity markets or working for businesses regulated by the agency.
The CFTC closed its remaining civil case after Mashinsky agreed to the permanent restrictions, effectively ending his ability to return to the U.S. commodities industry.
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