The Federal Trade Commission has completed settlements with all three founders of Celsius Network, requiring Alexander Mashinsky, Shlomi Daniel Leon and Hanoch Goldstein to pay a combined $16.5 million. The settlements resolve allegations that they deceived customers about the safety, liquidity and financial condition of the failed cryptocurrency platform. Goldstein's order was entered by the U.S. District Court for the Southern District of New York on July 20, completing the FTC's individual cases against the founders, following Mashinsky's order on April 28 and Leon's on June 29. The FTC alleged the founders made false representations while persuading customers to transfer cryptocurrency onto the platform, including claims about withdrawal availability and insurance coverage. The settlements close the remaining FTC cases arising from Celsius' collapse in 2022, when the company froze withdrawals and filed for bankruptcy, leaving customers unable to access approximately $4.7 billion in cryptocurrency.
Three Founders Pay $16.5 Million in Separate Settlements
Mashinsky will pay $10 million, Leon will pay $4.1 million and Goldstein will pay $2.4 million. The settlements resolve civil allegations rather than criminal charges, and the three men did not admit or deny the FTC's claims. The orders impose financial judgments and permanent restrictions on their future participation in businesses that handle cryptocurrency or other customer assets. Settlement figures can be affected by negotiations, available assets, other payment obligations and the terms agreed with each defendant.
Mashinsky Sentenced to 12 Years in Separate Criminal Case
Former Celsius CEO Alexander Mashinsky is responsible for the largest share of the FTC settlement at $10 million. The order permanently prohibits him from marketing or selling products and services that allow customers to deposit, exchange, invest or withdraw assets. Mashinsky's FTC case is separate from the criminal prosecution that resulted in his imprisonment. He pleaded guilty in December 2024 to commodities fraud and securities fraud arising from false representations about Celsius and a scheme to manipulate the price of the company's CEL token. U.S. District Judge John G. Koeltl sentenced Mashinsky on May 8, 2025 to 12 years in federal prison, followed by three years of supervised release. He was also ordered to pay a $50,000 fine and forfeit $48,393,446. According to the Department of Justice, Mashinsky generated approximately $48 million from token sales.
FTC Details Allegations of False Customer Promises
According to the FTC, Celsius falsely told customers they could withdraw their deposits at any time and that the company maintained sufficient reserves to satisfy its obligations. Celsius also allegedly claimed that customer deposits were protected by a $750 million insurance policy. The FTC said Celsius did not have a $750 million insurance policy covering customer deposits. It also alleged that the company lacked a reliable system for tracking its assets and liabilities until the middle of 2021, despite presenting itself as a financially controlled platform capable of protecting customer funds. Celsius promoted its Earn product with annual percentage yields of up to 18%. The FTC said most customers received considerably less and that the highest advertised rates were generally limited to users participating in Celsius' loyalty program and depositing selected cryptocurrencies. The company and its executives also repeatedly claimed that Celsius did not make unsecured loans. The FTC alleged that the platform had made unsecured institutional loans and engaged in other risky activities that were not adequately disclosed to depositors. In May 2022, Mashinsky publicly claimed that Celsius was stronger than ever and had billions of dollars in liquidity. Days before withdrawals were suspended, Celsius continued to claim that it had more than enough assets to meet its obligations, according to the agency. Celsius froze withdrawals, swaps and transfers on June 12, 2022. The company filed for Chapter 11 bankruptcy protection the following month, on July 13.
Settlement Funds Do Not Guarantee Direct Customer Payments
The payments do not mean each former Celsius customer will automatically receive money from the FTC settlements. The orders permit money collected by the agency to be used for consumer relief, while the principal process for distributing Celsius' remaining assets and recoveries to creditors continues through the company's bankruptcy and related proceedings. The settlement documents allow the FTC to use money it collects for consumer relief, including direct payments and the costs of administering a distribution program. Any money that cannot practicably be used for consumer relief may be transferred to the U.S. Treasury, subject to the terms of the orders. The agency has not announced how much of the $16.5 million will ultimately be collected, whether it will establish a separate Celsius refund program or how any eligible recipients would be identified. The $16.5 million now owed by the founders is separate from the suspended corporate judgment. It is also separate from Mashinsky's criminal forfeiture order and the distributions being managed through the Celsius bankruptcy estate.
Orders Impose Permanent Business Restrictions on All Three Founders
Celsius co-founder Shlomi Daniel Leon agreed to pay $4.1 million. His order imposes restrictions similar to those placed on Mashinsky, preventing him from marketing or selling services through which customers can deposit, exchange, invest or withdraw assets. Goldstein will pay $2.4 million and is permanently prohibited from marketing or selling retail products or services that allow consumers to buy, sell, deposit, withdraw, distribute or trade cryptocurrency. Leon and Goldstein resolved the FTC's civil allegations without admitting liability, while Mashinsky admitted criminal offenses and is serving a 12-year prison sentence. The FTC first sued Celsius and its founders in July 2023. The corporate entities settled immediately, accepting a permanent ban on handling customer assets and a monetary judgment of approximately $4.7 billion. That judgment was suspended so Celsius could use its remaining assets in the bankruptcy process. Mashinsky, Leon and Goldstein did not settle at that time, allowing the FTC's individual claims to continue until the agreements reached in 2026.
FAQ
What did the three Celsius founders agree to pay in FTC settlements?
Alexander Mashinsky will pay $10 million, Shlomi Daniel Leon will pay $4.1 million and Hanoch Goldstein will pay $2.4 million, totaling $16.5 million. The orders were entered on April 28, June 29 and July 20 respectively.
Will former Celsius customers automatically receive money from the $16.5 million settlements?
No. The payments do not mean each former Celsius customer will automatically receive money. The orders permit money collected by the agency to be used for consumer relief, while the principal process for distributing Celsius' remaining assets continues through the company's bankruptcy proceedings. The FTC has not announced how much will ultimately be collected or whether it will establish a separate refund program.
What criminal sentence did Alexander Mashinsky receive?
U.S. District Judge John G. Koeltl sentenced Mashinsky on May 8, 2025 to 12 years in federal prison, followed by three years of supervised release. He was also ordered to pay a $50,000 fine and forfeit $48,393,446 after pleading guilty in December 2024 to commodities fraud and securities fraud.
