Federal forfeiture can cut $10 million from New York's $35 million Mashinsky settlement
New York Attorney General Letitia James settled with former Celsius chief Alex Mashinsky for up to $35 million and a ban on trading securities and crypto. His $48.4 million federal forfeiture could reduce $10 million of that, leaving $25 million as the only fixed payment to the state.
The Investor · Invest desk
Key figures: $25 million in damages to New York, apart from the judgment forfeiture could reduce (disputed); $68.7 million in CEL sales New York alleges (unconfirmed); over 26,000 New York investors misled, per the complaint; Celsius bankruptcy losses over $4.7 billion (unconfirmed).
| Figure | Value | Note | Claim |
|---|---|---|---|
| Damages to New York, apart from the reducible judgment | $25 million | disputed | 10 |
| CEL sales NY alleges | $68.7 million | unconfirmed | 17 |
| NY investors misled, over | 26,000 investors | 6 | |
| Bankruptcy losses, over | $4.7 billion | unconfirmed | 16 |
What happened
- Mashinsky is already serving a 12-year federal prison sentence, handed down in May 2025 after he pleaded guilty to commodities and securities fraud tied to Celsius.
- The state alleged Mashinsky sold 25 million CEL tokens worth $68.7 million without disclosing the sales while publicly talking up the token's value.
- A CFTC consent order in June 2026 had already imposed a permanent trading ban on him.
- In July 2026 the FTC settled with him for $10 million and a lifetime ban on promotional activity.
Why it matters
- What it limits constraint Crypto Briefing describes the payment as a penalty on Mashinsky personally, outside the bankruptcy estate, so the settlement does not add to the pool Celsius creditors are paid from.
- What it costs cost Paid in full, $35 million is under 0.75% of the more than $4.7 billion lost in the bankruptcy, so customers still carry almost all of the collapse's cost.
- Who's exposed exposure On paper, the forfeiture, the FTC's $10 million and New York's terms put Mashinsky's money obligations at about $83.4 million to $93.4 million before overlaps, above the $68.7 million in CEL sales at the case's core.
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The reducible $10 million judgment is about 21% the size of Mashinsky's $48,393,446 federal forfeiture [2][14]. Crypto Briefing reports that New York may not collect the full $35 million, depending on how the federal and state obligations line up [10]. There are three possible results. Full credit against the forfeiture leaves the state with $25 million [13], no overlap gives it $35 million [10], and a partial credit lands somewhere in between. All three assume Mashinsky can pay, and the report does not say what he holds after the forfeiture.
I think $25 million is the figure to carry, and the $10 million should be treated as contingent until the two claims are reconciled. The counter-thesis is that the offset reaches only the margins, so close to the full $35 million arrives and the "up to" was drafting caution. A court record showing the $10 million judgment paid without a forfeiture credit would prove me wrong.
New York had leverage. Mashinsky had already pleaded guilty to commodities and securities fraud [1], and the Martin Act generally spares prosecutors from proving intent to defraud [5]. The state settled anyway, closing a complaint it had carried since 2023 [5]. It chose not to litigate for a number the federal case cannot reduce. Instead it accepted that part of its headline figure depends on federal terms, or rather, on how a federal forfeiture order is matched against a state judgment [10][2].
The money looks small from either side. Divided among the more than 26,000 New York investors the state says were misled [6], $35 million comes to at most about $1,350 each [8]. From Mashinsky's side, the federal forfeiture equals about 70% of the $68.7 million in CEL tokens the state alleges he sold without disclosure [17][19].
Celsius filed for Chapter 11 on July 13, 2022 [16]. New York announced its settlement on October 8, 2026, four years and nearly three months later [11][9]. Crypto Briefing counts it among the last open legal threads from the collapse [3].
What to watch
- A court or attorney general filing that shows how the $10 million judgment is credited against the $48,393,446 federal forfeiture.
- Whether New York says how it will use the $25 million in damages, including any distribution to the more than 26,000 residents its complaint covered.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence62
- Adoption
- Not scored
- Hype gap+45
- Incentives55
- Confidence60
Perspective Coverage
12 publishers- Builder
- Builder 6%
- Operator
- Operator 38%
- Investor
- Investor 56%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
In May 2025 Mashinsky was sentenced to 12 years in prison after pleading guilty to commodities and securities fraud related to Celsius's operations.
- [2]
Mashinsky was ordered to forfeit $48,393,446 in the federal case.
- [3]
The settlement resolves fraud allegations tied to Celsius's Earn Interest Accounts and the CEL token and is one of the last open legal threads from the Celsius collapse.
- [4]
The Commodity Futures Trading Commission entered a consent order in June 2026 that imposed a permanent trading ban on Mashinsky.
- [5]
The New York case began as a civil complaint filed in 2023 under the Martin Act, the state's securities fraud statute; prosecutors generally do not need to prove that a defendant intended to defraud anyone.
- [6]
The state's complaint said Celsius and Mashinsky used deceptive practices that misled more than 26,000 New York investors.
- [7]
The state payment is a penalty against Mashinsky personally, not part of the Celsius bankruptcy estate.
- [8]
Spread across more than 26,000 New York investors, $35 million is at most about $1,350 each.
- [9]
New York's settlement came four years and nearly three months after Celsius's Chapter 11 filing.
- [10]
The $35 million has two parts: a $25 million payment in damages to New York and a $10 million monetary judgment that Mashinsky's federal forfeiture obligations could reduce; New York may not collect the full $35 million depending on how the federal and state obligations line up.
- [11]
On October 8, 2026, New York Attorney General Letitia James announced a settlement with former Celsius Network CEO Alex Mashinsky requiring him to pay up to $35 million to the state and barring him from trading securities or crypto.
- [12]
In July 2026 the Federal Trade Commission reached a settlement with Mashinsky for $10 million that included a lifetime ban on promotional activity.
- [13]
If the federal forfeiture fully offsets the $10 million judgment, New York collects $25 million.
- [14]
The $10 million judgment is about 21% of the $48,393,446 federal forfeiture.
- [15]
On paper, before overlaps, Mashinsky's money obligations from the federal forfeiture, the FTC settlement and New York's settlement run from about $83.4 million to $93.4 million, both above the $68.7 million in undisclosed CEL sales.
- [16]
Celsius filed for Chapter 11 bankruptcy on July 13, 2022; losses during the bankruptcy topped $4.7 billion.
- [17]
Mashinsky sold 25 million CEL tokens worth $68.7 million without disclosing it while publicly talking up the token's value.
- [18]
The full $35 million is under 0.75% of the more than $4.7 billion in losses during the Celsius bankruptcy.
- [19]
The federal forfeiture equals about 70% of the $68.7 million value of the CEL tokens Mashinsky sold without disclosure.
Sources
12 independent publishers whose own reporting we read for this story.
- Attorney General James Bans Former Cryptocurrency CEO Who Defrauded Investors from Financial Industry
ag.ny.gov
1 article · October 9, 2026
- coindesk.comNew York AG secures up to $35 million and lifetime crypto ban from Celsius’ Alex Mashinsky
1 article · October 9, 2026
- cointelegraph.comNew York permanently bars Celsius founder Mashinsky in $35M fraud settlement
1 article · October 9, 2026
- crowdfundinsider.comNew York Attorney General (NYAG) Secures Permanent Industry Ban and Up to $35M from Ex- Celsius Network CEO Alex Mashinsky
1 article · October 10, 2026
- crypto.newsAlex Mashinsky gets lifetime crypto ban in New York settlement
1 article · October 9, 2026
- cryptobriefing.comNew York AG Letitia James secures up to $35M from former Celsius CEO Alex Mashinsky
1 article · October 9, 2026
- cryptopolitan.comMashinsky’s fourth lifetime ban comes with $35 million that New York may never collect
1 article · October 9, 2026
- cryptoslate.comCelsius founder faces lifetime ban, but can trade his own crypto
1 article · October 9, 2026
- cryptotimes.ioCelsius Founder Alex Mashinsky Faces Up to $35M Under NY Settlement
1 article · October 9, 2026
- decrypt.coNew York AG Secures Up to $35M and Industry Ban From Ex-Celsius CEO Alex Mashinsky
1 article · October 9, 2026
- news.bitcoin.comCelsius Founder Alex Mashinsky Gets Lifetime Ban From New York AG
1 article · October 9, 2026
- unchainedcrypto.comNew York Permanently Bars Ex-Celsius CEO Mashinsky From Crypto and Securities Industries - Unchained
1 article · October 9, 2026
Topics and entities
Topics
- Crypto Enforcement And Prosecution
- Criminal asset forfeiture
- Crypto lending
Entities
- CFTC
- U.S. Department of Justice
- SEC
- Federal Trade Commission
- New York Attorney General
- Letitia James