Estimated reading time: 8 minutes.
Key facts
- Development: New York announced an October 9, 2026 settlement with former Celsius chief executive Alex Mashinsky.
- State case: People of the State of New York v. Alex Mashinsky, Index No. 450040/2023, New York County Supreme Court.
- Money: The $25 million and $10 million state obligations have separate conditions. The $35 million headline is not an announced consumer payment fund.
- Restrictions: The filed terms prohibit securities, commodities and cryptocurrency business activities, with an express exception for Mashinsky's own personal purchases and sales in one provision.
- Admissions: Mashinsky admits specified New York law violations concerning regulatory approval representations and his CEL token sales.
- Reader action: The reviewed settlement materials announce no new consumer application, payment schedule or claim deadline.
In this article
- What New York announced
- Celsius, its Earn accounts and its former chief executive
- The conduct behind the case
- Why the civil and criminal proceedings are different
- How the conditional money terms work
- What the business ban covers
- The timeline from withdrawals to the settlement
- What Celsius customers can and cannot infer
- Evidence boundaries and the next steps
- Frequently asked questions
What New York announced
New York Attorney General Letitia James announced a settlement with Alex Mashinsky on October 9, 2026 that addresses his participation in financial businesses and imposes conditional monetary obligations totaling up to $35 million. Mashinsky co-founded Celsius Network LLC, a cryptocurrency lending platform that froze customer withdrawals and entered bankruptcy in 2022.
For people who lost access to Celsius assets, the distinction between a government settlement and a new refund program matters. The announcement does not invite former users to apply for a share of $35 million. The filed agreement directs any required state monetary relief to New York, and its payment conditions concern Mashinsky's federal forfeiture and imprisonment.
The Office of the Attorney General, New York's state law-enforcement office, brought this civil action on behalf of the People of the State of New York. It is not a newly opened class action with a consumer claim form. A civil enforcement action seeks remedies such as restrictions and money through a government lawsuit. A separate criminal prosecution has already resulted in guilty pleas and a prison sentence.
An announced maximum is not a refund pool
The two New York money obligations can be satisfied under different conditions. The reviewed terms do not establish individual Celsius customer payments.
Celsius, its Earn accounts and its former chief executive
Celsius offered cryptocurrency services through a website and mobile application. Cryptocurrency is a digital asset, such as Bitcoin or Ether, recorded on an electronic ledger called a blockchain. The original New York complaint describes customers transferring assets from their own digital wallets into Celsius accounts, purchasing cryptocurrency through the application, or borrowing against assets they provided.
The company's Earn program let users transfer cryptocurrency to Celsius in return for promised interest. Yield means the return the service promised on those transferred assets. According to the complaint, Celsius pooled the assets and controlled the investments used to generate revenue. Customers did not choose how Celsius deployed their Earn balances.
This was different from merely storing an asset in a wallet under the customer's own control. The dispute concerns promises about what Celsius would do with assets customers entrusted to the platform, the risks involved and whether representations about safety and oversight were truthful.
Celsius also had a token called CEL, a digital asset associated with its platform. The settlement addresses Mashinsky's statements about his personal CEL sales separately from statements about the Earn program. Holding an Earn account and buying CEL were not identical activities, even though both involved Celsius.
Mashinsky was the company's former chief executive and a prominent promoter. The complaint identifies Celsius Network LLC as part of a group of related corporate entities. This New York lawsuit names Mashinsky personally as the defendant; the October settlement is not an agreement by each Celsius entity to reimburse all customer balances.
The conduct behind the case
The state's January 2023 complaint alleged that, between 2018 and at least June 2022, Mashinsky attracted investors by presenting Celsius as a safe alternative to banks while concealing risky uses of their assets. It alleged misleading statements about safety, the number of users, investment strategies and Celsius's financial condition.
The complaint describes a gap between promised low-risk lending and alleged investment practices. A collateralized loan is backed by assets the lender can use to offset a default. An uncollateralized loan lacks that pledged protection. According to the complaint, Celsius made substantial uncollateralized loans despite statements that it did not engage in that practice.
Those allegations explain the causal issue. If a platform takes risks different from those it describes, customers may transfer or leave assets there without understanding the exposure. The complaint alleged that Mashinsky continued reassuring users and attracting deposits while Celsius's losses and withdrawal pressure increased.
The October stipulation goes beyond a generic settlement without admissions. Mashinsky expressly admits violating New York's Martin Act and Executive Law section 63(12) through specified false or materially misleading statements and omissions concerning regulatory approval and his CEL token sales. The Martin Act is New York's law against fraudulent practices involving securities and commodities. Section 63(12) allows the attorney general to seek civil remedies for repeated fraud or illegality in business.
These admissions should not be flattened into either extreme. It would be inaccurate to say the settlement contains no admitted wrongdoing. It would also be inaccurate to present every allegation in the original complaint as a separately tried factual finding. The stipulation identifies particular admissions and additional terms governing future enforcement by the attorney general.
Why the civil and criminal proceedings are different
The state case is in the Supreme Court of the State of New York, County of New York. Despite its name, that court is a state trial court. The settlement packet identifies Justice Anar Rathod Patel and Index No. 450040/2023.
The federal prosecution is United States v. Mashinsky, No. 23-CR-347, in the U.S. District Court for the Southern District of New York. That is a federal trial court. The state stipulation recounts Mashinsky's December 2024 guilty pleas to commodities fraud and a fraudulent scheme to manipulate CEL's price. Commodities fraud concerns deceptive conduct involving the assets or transactions addressed by that charge; market manipulation concerns artificially affecting a market rather than letting ordinary buying and selling determine the price.
The stipulation records admissions that Mashinsky falsely suggested regulatory approval for Celsius's Earn program and failed to disclose CEL sales while publicly representing that he was not selling. It also records Judge John G. Koeltl's May 8, 2025 sentence of 144 months, or 12 years, and a $48,393,446 forfeiture obligation.
Forfeiture means surrendering money or assets to the government in connection with criminal conduct. It is not interchangeable with a class settlement fund or an individual restitution award. The New York agreement uses the federal forfeiture obligation as part of its own conditional money structure.
How the conditional money terms work
The filed consent-order terms set out two obligations. First, Mashinsky is to pay New York $25 million in damages, but that obligation is deemed satisfied if he pays $10 million to the U.S. Department of Justice under the specified federal forfeiture terms. The Department of Justice is the federal law-enforcement department involved in the criminal case.
The document allows dollar-for-dollar credit for payments made to that department after May 20, 2025 toward the specified $10 million. If the required payment is not made as the provision requires, the entire $25 million is due to the state attorney general. This does not describe New York automatically collecting $25 million in addition to the qualifying federal payment.
Second, the terms impose a $10 million state monetary judgment that can be deemed satisfied through service of the criminal imprisonment sentence. The provision expressly addresses circumstances in which the sentence is overturned or reduced, including court relief and specified release or credit mechanisms. The attorney general's announcement summarizes it as an obligation if Mashinsky does not serve his full sentence.
The criminal forfeiture figure and the two state amounts should therefore not be added together and described as money available for customer checks. They have different legal purposes and conditions. The reviewed packet does not establish whether the qualifying additional federal payment has already been completed or what any individual former customer will receive.
Neither state amount is an unconditional collection forecast
The $25 million obligation depends on specified federal-payment terms. The separate $10 million obligation has imprisonment-related terms. No verified per-customer award follows from either amount.
What the business ban covers
The attorney general announced a permanent ban on Mashinsky's participation in the securities, commodities and cryptocurrency industries. An injunction is a legal restriction on conduct. The filed terms cover activities including promotion, investment advice, management, distribution and roles in financial businesses.
They also prohibit compensated communications advising on purchases or sales and forming or assisting entities to solicit investments. These provisions address the promotional and business roles that were central to the state's case, not simply whether Mashinsky can repeat the same platform name.
One provision expressly excepts his own personal purchases or sales from its restrictions on listed transaction activities. That qualification matters. A blanket statement that the settlement forbids every personal cryptocurrency trade would overstate the reviewed language. The exception should not be confused with permission to resume a financial business or provide compensated investment advice.
The timeline from withdrawals to the settlement
The original complaint says Celsius froze customer withdrawals on June 12, 2022 and filed for bankruptcy on July 13, 2022. Bankruptcy is a court process for addressing a debtor's financial obligations; in this matter it is a separate proceeding involving Celsius's entities and creditors.
New York filed its original civil complaint on January 5, 2023. The stipulation records an amended complaint on March 27, 2023, denial of a dismissal motion on August 4 and Mashinsky's answer on September 12. Denial of dismissal allowed the case to proceed; it was not a trial verdict establishing every allegation.
The federal guilty pleas followed in December 2024, and sentencing occurred in May 2025. The state stipulation is dated October 8, 2026, and the published packet bears an October 8 filing stamp. The attorney general announced the resolution on October 9.
These dates describe different events. The consumer losses did not begin with the October announcement, and the state settlement did not create the May 2025 prison sentence. Its terms connect the later civil resolution to existing criminal obligations.
What Celsius customers can and cannot infer
The original complaint described hundreds of thousands of affected investors and more than 26,000 New Yorkers. Those figures explain the reach of the state's allegations. They are not a newly certified payment class or a count of approved claimants under the October agreement.
The attorney general reports that more than $3.4 billion had been distributed to creditors in Celsius's bankruptcy by August 2026. Creditors are people or entities owed money in that proceeding. That aggregate is reported bankruptcy activity, not a promise that every customer has recovered their balance and not a new $3.4 billion distribution created by this settlement.
Keep the proceedings separate
The New York enforcement settlement, federal criminal forfeiture and Celsius bankruptcy concern related events but do not share an announced new claim form or uniform payment amount.
The reviewed announcement and agreement provide no new consumer claim deadline, administrator application or individual payment schedule for the state settlement. Readers following an existing Celsius bankruptcy claim should distinguish that process from the October enforcement news. This article does not determine a person's creditor status or advise how to pursue a legal claim.
Evidence boundaries and the next steps
This report uses the attorney general's current announcement, the filed October stipulation and attached consent-order text, and the original January 2023 complaint. The announcement establishes what the state says it secured. The stipulation establishes the agreed terms and specific admissions. The original complaint supplies attributed background allegations, not a replacement for the later amended pleading.
The published consent-order attachment has a blank judicial signature and date line. This report does not treat its filing stamp as proof of a separately signed judicial entry or assign an unverified entry date. That limit does not erase the executed stipulation or the attorney general's announcement; it distinguishes the records actually reviewed.
The stipulation preserves Mashinsky's ability to take legal positions in other proceedings to which the attorney general is not a party, including a petition for post-conviction relief. Post-conviction relief is a request to challenge a conviction or sentence after judgment. The record reviewed here does not establish the outcome of such a request or predict a changed prison term.
The agreement requires cooperation and proof of compliance concerning the federal obligations and provides for state enforcement. Monitoring those obligations and any later court record is different from waiting for an announced consumer claims window. For other matters with verified participation information, readers can consult the Class Action Pulse case directory; it is not an official Celsius claim channel.
Frequently asked questions
Can Celsius customers apply for part of the $35 million?
The reviewed New York announcement and filed terms establish no new consumer application or individual payment schedule. The state money obligations are conditional and are directed to New York.
Is the $25 million payment guaranteed?
No. The terms deem that state obligation satisfied if Mashinsky makes the specified $10 million federal payment. They also describe qualifying credits and what happens if payment is not made as required.
Why is the other $10 million linked to prison?
The filed terms connect satisfaction of that separate state judgment to service of the criminal imprisonment sentence and expressly address sentence reductions or other specified changes. It is not a scheduled customer payout.
Does Mashinsky admit wrongdoing in the state settlement?
Yes. The stipulation contains specified admissions involving regulatory approval representations and CEL token sales, as well as acknowledgment of the federal guilty pleas. Those admissions are distinct from untried allegations elsewhere in the complaint.
Does the ban prohibit every personal cryptocurrency transaction?
The filed transaction restriction has an exception for his own personal purchases or sales. Separate provisions broadly restrict business participation and compensated investment communications.
Is the bankruptcy distribution the same as this settlement?
No. The attorney general reports more than $3.4 billion in bankruptcy distributions as of August 2026. That separate aggregate does not establish a new payment amount or claim deadline under the October state settlement.