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U.S. regulators have imposed a $4.7 billion civil penalty on Alexander Mashinsky and permanently banned him from the crypto and financial services industries, in one of the strongest enforcement actions since the sector’s 2022 collapse.
The Federal Trade Commission’s action adds to a 12-year prison sentence Mashinsky is already serving.
The $4.7 billion figure is linked to the scale of losses associated with Celsius Network’s bankruptcy. When Celsius filed for bankruptcy, it owed customers roughly $4.7 billion, and the penalty was set to mirror that amount.
A New York judge, Denise Cote, approved the order. Most of the penalty is suspended, with Mashinsky required to pay $10 million immediately. The $10 million payment can be covered through funds already tied to a separate forfeiture order.
Industry observers say the lifetime ban may be more consequential than the financial penalty. The order prevents Mashinsky not only from running a crypto firm, but also from promoting, offering, or operating any service involving deposits, investments, or asset transfers.
The restrictions apply across both crypto and traditional finance. The order also includes reporting and compliance requirements for up to 18 years.
The suspended portion of the $4.7 billion penalty carries a key condition: if regulators later find that Mashinsky concealed assets, the full $4.7 billion could be reinstated.
The central question is whether the suspended penalty will ever be enforced in full. That outcome depends on Mashinsky’s financial disclosures in the years ahead. For now, regulators have secured a penalty aligned with the estimated damage from Celsius’s collapse and removed a central figure from the industry.
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