CFTC Permanently Bars Celsius Founder Mashinsky From Trading

FTX filed for bankruptcy in November 2022 after the cryptocurrency exchange’s collapse exposed a fraud involving more than $8 billion in customer deposits diverted to affiliated trading firm Alameda Research. Former Alameda Chief Executive Caroline Ellison and FTX co-founder Zixiao “Gary” Wang later pleaded guilty and testified against Sam Bankman-Fried, providing key evidence about the companies’ controls, code and movement of customer funds.

The Commodity Futures Trading Commission announced supplemental consent orders on Aug. 19, 2026, barring Ellison and Wang from trading for five years. Ellison also received a 10-year CFTC registration ban, while Wang was barred from registration for eight years. The regulator did not seek restitution, disgorgement or civil monetary penalties, citing their substantial assistance in the FTX investigation and their commitment to continue cooperating.

Celsius drew retail customers with high-yield crypto accounts before freezing withdrawals on June 12, 2022, leaving about $4.7 billion of customer assets inaccessible and filing for bankruptcy the following month. Alex Mashinsky pleaded guilty on Dec. 3, 2024, to commodities and securities fraud stemming from misrepresentations about Celsius and manipulation of its CEL token.

U.S. District Judge John Koeltl sentenced Mashinsky on May 8, 2025, to 144 months in prison and three years of supervised release, while imposing a $50,000 fine and ordering $48,393,446 forfeited. Mashinsky filed a pro se motion dated May 18, 2026, seeking to vacate his conviction and sentence. The U.S. Attorney’s Office for the Southern District of New York called his arguments meritless and unsupported by a sworn declaration, urging the court to deny the motion without an evidentiary hearing.

Celsius Network drew customers with high-yield crypto accounts before filing for bankruptcy in July 2022, leaving billions of dollars in customer assets trapped. The Federal Trade Commission sued the company and its co-founders in July 2023, alleging they falsely claimed deposits were always available, backed by a $750 million insurance policy and capable of earning annual yields of as much as 18%.

The FTC said on July 20, 2026, that Shlomi Daniel Leon and Hanoch “Nuke” Goldstein agreed to pay $4.1 million and $2.4 million, respectively, for a combined $6.5 million. The orders also bar them from marketing or selling certain crypto and asset-deposit products. Including Alexander Mashinsky’s separate $10 million payment, the three Celsius founders will pay $16.5 million to resolve the regulator’s claims.

Celsius, once a major crypto lender, froze withdrawals and filed for bankruptcy in July 2022 as a digital-asset market downturn exposed a multibillion-dollar shortfall. Founder and former CEO Alex Mashinsky pleaded guilty in December 2024 to commodities fraud and securities fraud tied to misleading customers and manipulating the CEL token. His prosecution became one of the most prominent criminal cases to emerge from the collapse of crypto lending.

On May 26, 2026, Mashinsky, acting without new counsel, asked the U.S. District Court for the Southern District of New York to vacate the 144-month sentence imposed by Judge John Koeltl in May 2025. He alleged ineffective assistance by Mukasey & Young LLP, saying the firm’s financial distress created a conflict of interest, and invoked the “fruit of the poisonous tree” doctrine to challenge evidence. The court has not ruled on the motion.

Celsius and FTX both filed for bankruptcy during the 2022 crypto market crash. Former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison for fraud and manipulating the price of CEL. FTX founder Sam Bankman-Fried received a 25-year sentence and was ordered to forfeit more than $11 billion, underscoring how criminal liability, asset recovery and anti-fraud regulation continue to reverberate after the platforms’ collapses.

On May 6, 2026, Mashinsky’s lawyers filed to withdraw, leaving him to represent himself. On May 5, the Spokane Valley City Council unanimously approved a ban on crypto ATMs, with violators subject to a $250 fine and operators given 30 days to comply. On May 7, federal prosecutors in the Southern District of New York sought the forfeiture of $10 million held by Fiduciary Trust Company that Semafor had returned from SBF’s investment.

Crypto lending platform Celsius halted customer withdrawals in June 2022 and filed for bankruptcy the following month, exposing its high-risk practices and a massive funding shortfall. On July 13, 2023, the US Federal Trade Commission sued founder Alex Mashinsky and other executives, accusing them of soliciting deposits with false assurances that customer assets were safe and could be withdrawn at any time. The action became a significant consumer-protection case involving a crypto platform.

The US District Court for the Southern District of New York approved the settlement on April 28, 2026. Mashinsky must pay the FTC $10 million and is permanently barred from promoting, marketing or offering products or services that allow customers to deposit, exchange, invest or withdraw assets. The court also entered a $4.72 billion judgment for the FTC, but suspended the remainder of the payment. If Mashinsky made material misrepresentations in his asset disclosures, the FTC may seek to recover the full amount.