Southern District of New York approves CFTC settlement with Celsius founder Alex Mashinsky

The U.S. District Court for the Southern District of New York has approved a settlement between the Commodity Futures Trading Commission (CFTC) and Celsius founder Alex Mashinsky. For high-risk operators, the important part is not the headline punishment but the regulatory record: the case ties together customer-fund misuse, misleading claims about safety and returns, and a lifetime ban from commodities trading, including crypto.

1. The settlement permanently bars Mashinsky from trading commodities, including cryptocurrencies, and from obtaining licenses from the U.S. agency. It also requires him to comply with the Commodity Exchange Act (CEA) and CFTC rules.
2. The court order closes the CFTC case against Mashinsky and Celsius, which the regulator brought in July 2023. The complaint said Celsius mixed its own digital assets with customer funds in order to generate yield, then passed that yield back to customers as weekly interest-like rewards.
3. According to the CFTC, from 2018 through June 2022 Mashinsky and Celsius deceived hundreds of thousands of customers about the safety and profitability of their investments, and about Celsius’s compliance with U.S. rules. The regulator also said Mashinsky used videos, blog posts, social media messages, and livestreams to market Celsius as a safe alternative to traditional banks and to promise high deposit yields.
4. The complaint says Celsius used risky investment strategies to pay customers, including multimillion-dollar unsecured loans. The agency argued that Celsius kept assuring users the platform was safe even as it suffered catastrophic losses and ultimately filed for bankruptcy. In total, Celsius received about $20 billion in funds.
5. Separately, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Mashinsky in July 2023 on the same core allegations. In December 2024, he pleaded guilty to commodities fraud and securities fraud. In May 2025, he was sentenced to 12 years in prison, fined $50 000, and ordered to forfeit $48,3 million.

For PSPs, banks, and acquirers looking at crypto lending or yield products, the useful takeaway is straightforward: once customer funds, return promises, and compliance claims all sit in the same pitch deck, regulators tend to treat the product as a supervision problem, not a marketing problem.