Crypto Legal Week: Former Celsius CEO to Represent Himself, Washington City Bans Crypto ATMs

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 marketed itself as a bank-like haven where customers could earn high yields on crypto deposits. From 2018 through June 2022, it took in assets worth about $20 billion before collapsing during that year’s crypto-market rout. The CFTC alleged founder and former CEO Alexander Mashinsky misrepresented the platform’s safety, profitability and regulatory compliance while Celsius pursued uncollateralized loans and other risky strategies, making the case a prominent test of US commodity-law protections for digital-asset customers.

The US District Court for the Southern District of New York entered a consent order on June 12, 2026, and the Commodity Futures Trading Commission announced it on June 18. Mashinsky admitted violating federal anti-fraud rules and accepted permanent CFTC trading and registration bans, resolving the civil case filed in July 2023. Separately, he was sentenced on May 8, 2025, to 12 years in prison, fined $50,000 and ordered to forfeit $48,393,446 after pleading guilty to commodities and securities fraud.

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.

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.