Settlement with the FTC
Alexander Mashinsky, the founder of Celsius Network, has reached a settlement with the Federal Trade Commission (FTC) that prohibits him from promoting any asset-related services. The agreement, approved by Judge Denise Cote in the Southern District of New York, also requires him to pay $10 million as part of a larger monetary judgment totaling $4.72 billion, most of which is currently suspended.
Barred Activities
Under the stipulations of this order, Mashinsky is permanently barred from marketing, offering, or distributing services that involve the deposit, exchange, investment, or withdrawal of assets. This development comes in the wake of Celsius’s bankruptcy filing in July 2022, which was prompted by a suspension of withdrawals and a significant balance sheet shortfall exceeding $1.2 billion.
Financial Obligations and Legal Consequences
The FTC has indicated that while Mashinsky must initially pay $10 million, this requirement may be fulfilled through payments made to the U.S. Department of Justice in connection with his criminal prosecution. In 2025, he pleaded guilty to charges of commodities and securities fraud, ultimately leading to a 12-year prison sentence as authorities accused him of misleading clients about the risks and safety of their investments.
Consumer Recovery and Future Implications
The settlement has been designed to facilitate consumer recovery while limiting the financial impact on Mashinsky. Although the majority of the $4.72 billion judgment remains suspended, the FTC retains the authority to enforce this judgment fully if Mashinsky is found to have misrepresented his financial disclosures. Should the conditions warrant reinstatement, the entire sum would be due immediately, after accounting for any payments already made through this settlement to consumers involved in related legal proceedings, including the Celsius bankruptcy case.
Related Recovery Efforts
In related recovery efforts, the Blockchain Recovery Investment Consortium recently announced a settlement of $299.5 million with Tether concerning claims related to collateral transfers made in July 2022. This is part of the broader legal actions ongoing since the fall of Celsius Network, as stakeholders seek redress for losses incurred during the firm’s turbulent financial period.
