Key facts
- Former Celsius CEO Alexander Mashinsky has been permanently banned from the crypto industry and CFTC-regulated markets.
- Mashinsky must pay a $10 million fine as part of the FTC settlement.
- The FTC settlement prohibits Mashinsky from promoting or marketing digital asset products or services for life.
- A $4.72 billion restitution judgment remains against Mashinsky, which regulators can pursue if he misrepresents his financial status.
- Mashinsky is already serving a 12-year prison sentence for fraud charges related to Celsius's collapse.
Alexander Mashinsky, the former CEO of the bankrupt crypto lender Celsius Network, has received a permanent ban from the cryptocurrency industry and trading markets regulated by the Commodity Futures Trading Commission (CFTC). The CFTC's consent order resolves its 2023 enforcement action and imposes a permanent registration ban on Mashinsky, marking the regulator's first case against a digital asset lending platform.
Mashinsky, who also acted as CEO of Celsius, is currently serving a 12-year prison sentence after pleading guilty to securities and commodities fraud charges related to the collapse of his lending business. Celsius paused withdrawals in June 2022 and subsequently filed for bankruptcy, resulting in customers losing access to billions of dollars in deposits.
Alongside criminal charges, Mashinsky faced civil lawsuits from the SEC and FTC. Earlier this year, the Federal Trade Commission (FTC) reached a settlement with Mashinsky, which included a permanent ban from working in the cryptocurrency ecosystem and a $10 million fine. This fine can be lifted if Mashinsky fails to materially disclose assets, though a $4.72 billion restitution judgment remains active and can be pursued if he misrepresents his finances.
In May, Mashinsky filed a motion to vacate his prison sentence, citing ineffective counsel and a conflict of interest related to FTX co-founder Sam Bankman-Fried. Mashinsky claims Bankman-Fried manipulated Celsius's token (CEL), causing harm to his firm and its customers.
The FTC settlement does not affect Mashinsky's criminal liability. The multi-agency approach by the FTC, SEC, and CFTC aims to hold executives accountable, though the restitution for consumers is limited due to the uncollectible nature of the large judgment.