The facts
New York Attorney General Letitia James announced that she has secured up to $35 million from Alex Mashinsky, a co-founder and former CEO of cryptocurrency lending platform Celsius Network LLC, as well as a permanent ban on his participation in the securities, commodities, and cryptocurrency industries.
James sued Mashinsky in 2023 for defrauding hundreds of thousands of investors, including more than 26,000 in New York, by misleading them about the safety of Celsius to encourage them to deposit billions of dollars in digital assets onto his platform. Celsius lost hundreds of millions of dollars on risky investments, which Mashinsky attempted to hide from investors. He also failed to register as a salesperson for Celsius and as a securities and commodities dealer, in violation of New York law.
Mashinsky repeatedly claimed that Celsius was "safer than a bank." In reality, Celsius was not subject to the strict federal or state requirements that banks were. An investigation found that investors' assets were routinely used in high-risk strategies, many of which resulted in losses that Mashinsky concealed. The collapse left many investors in financial ruin: one New York resident mortgaged two properties to invest with Celsius, and a disabled veteran lost a $36,000 investment that had taken him nearly a decade to save.
Mashinsky is currently serving a 12-year prison sentence resulting from a parallel federal criminal case, in which he was also ordered to forfeit more than $48 million to the federal government. His investors and creditors have received more than $3.4 billion in the Celsius bankruptcy proceeding.
The settlement has its own fee schedule. Mashinsky must pay $25 million to New York if he fails to forfeit $10 million in ill-gotten gains to the federal government, and another $10 million to New York if he does not serve his full prison sentence. Separately, Celsius founders and executives were forced to pay $16.5 million to the Federal Trade Commission.
"Alex Mashinsky promised New Yorkers that his company was "a secure place to invest their hard-earned savings," only to leave them penniless when his risky investments collapsed," said Attorney General James.
Our take
Alex Mashinsky's entire fucking grift was telling people his crypto casino was 'safer than a bank.' What a complete prick. It was safer than a bank in the same way that lighting your cash on fire is safer than putting it in a vault: at least you can watch the embers die and know exactly where your money went. This absolute cunt promised security while secretly pissing away hundreds of millions on high-risk bets he then hid from the very people who trusted him with their life savings. He wasn't running a bank; he was running a confidence game for morons with a Twitter account.
Look at the pathetic human wreckage he left behind: a disabled veteran who spent a decade saving $36,000, now gone. A New Yorker who mortgaged two fucking properties, now ruined. Mashinsky took their 'hard-earned savings' and treated it like his personal gambling stake. His 'platform' was just a hole he dug with other people's money, and then he had the balls to stand at the edge and tell everyone it was a fortress. He's a coward and a liar, and the only thing he ever built correctly was the legal case that put him in prison for twelve years.
Now the settlement is a masterpiece of petty, bureaucratic revenge. This dickhead has a payment plan with more conditional fees than a payday loan shark. He owes $25 million to New York if he doesn't forfeit $10 million to the feds, and another $10 million if he doesn't serve his full sentence. It's a fucking loyalty program for failure. Even the government has given up on him ever doing the right thing voluntarily; they've just built a financial bear trap around his pathetic existence. The permanent ban from the industry is the first honest service he's ever been associated with: a guarantee that this talentless asshole will never be allowed near money again.
He's serving a 12-year sentence and still owes tens of millions. His investors got $3.4 billion back in bankruptcy - money they never should have lost in the first place. The scoreboard is fucking brutal: Mashinsky loses everything, goes to prison, and becomes a permanent financial pariah. The people he conned get a fraction of their lives back. The only thing 'safer than a bank' was the prison cell waiting for this greedy, fraudulent piece of shit. Good fucking riddance.
