New York secures crypto industry ban, up to $35 million from ex-Celsius CEO

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NY bans ex-Celsius CEO

Highlights

New York Attorney General Letitia James secures up to $35 million from former Celsius CEO Alex Mashinsky and permanently bans him from securities, commodities, and cryptocurrency industries.
Mashinsky is serving a 12-year federal prison sentence, while Celsius creditors have received more than $3.4 billion through bankruptcy proceedings.
In April, the FTC settlement included a suspended $4.7 billion judgment, $10 million payment, and 18-year reporting rule, also barring Mashinsky from crypto and financial services.

Settlement terms and enforcement action

As reported by The Block, citing the New York Attorney General's office, Attorney General Letitia James secures up to $35 million from Mashinsky and a permanent ban on his participation in the securities, commodities and cryptocurrency industries over allegations that he defrauds investors.

James sues Mashinsky in 2023, accusing him of misleading hundreds of thousands of investors about the crypto lending platform's safety and investment strategies while Celsius takes on risky investments and conceals losses. In a statement, James says Mashinsky promised New Yorkers that his company was a secure place to invest their savings, only to leave them penniless when those investments collapsed.

Broader fallout for Celsius and crypto oversight

Mashinsky is currently serving a 12-year federal prison sentence, while Celsius creditors have received more than $3.4 billion through the company's bankruptcy proceedings.

In April, the Federal Trade Commission reaches a settlement with Mashinsky that includes a suspended $4.7 billion judgment, a $10 million payment and an 18-year reporting requirement. That settlement also bars him from future involvement in the cryptocurrency and financial services industries.

In June, the Commodity Futures Trading Commission also settles with the former Celsius chief executive, barring Mashinsky from future anti-fraud violations and imposing permanent trading and registration bans. James says the state is acting to stop scammers from using cryptocurrencies to prey on New Yorkers and to prevent Mashinsky from targeting investors again.

In our earlier article on the National Stock Exchange of India’s warning about the Telegram channel “Option Gyan,” we noted that offers promising assured or guaranteed stock-market returns are prohibited and can expose retail investors to fraud. The exchange also cautioned that investors who engage with such unauthorized advisory schemes may lose access to investor protection, dispute resolution, and grievance redressal mechanisms.

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