Celsius founders hit with permanent crypto bans

A federal court has entered permanent orders barring Celsius co‑founders Alexander Mashinsky and Shlomi Daniel Leon and a third executive, Goldstein, from marketing or offering broad cryptocurrency and asset‑services products. The orders were entered in proceedings tied to a Federal Trade Commission case filed in 2023.

The injunctions prohibit the defendants from advertising, marketing, promoting, offering or distributing products or services used to deposit, exchange, invest, withdraw or trade assets. The orders also bar them from assisting others in those activities. Mashinsky’s order covers assets generally, Leon’s explicitly names cryptocurrency, banking and financial assets, and Goldstein’s order targets retail crypto products. The restrictions apply whether the individuals act directly or through intermediaries.

All three orders ban material misrepresentations about products and services. The injunctions forbid obtaining or attempting to obtain customer information from financial institutions through false or fraudulent representations. The banned information includes bank‑account details, login credentials, private keys and wallet information. Mashinsky and Leon must obtain express, informed consent before disclosing consumers’ nonpublic personal information. The court requires the executives to keep records and file reports for multiple years to allow agency and court oversight.

The Federal Trade Commission set combined monetary obligations at roughly $16.5 million. The agency’s filings allocate about $10 million to Mashinsky, $4.1 million to Leon and $2.014 million to Goldstein. The orders allow credits for payments made through Department of Justice forfeiture actions and settlements in Celsius’s bankruptcy. Mashinsky’s $10 million obligation may be satisfied by qualifying DOJ forfeiture proceeds, while Leon’s and Goldstein’s obligations may be offset by payments or releases in the Celsius bankruptcy adversary proceeding. The orders note the legal channels are separate and do not guarantee additional recovery for Celsius creditors. Funds received by the FTC may be used for consumer redress; amounts not used for relief are to be deposited in the U.S. Treasury.

The injunctions reflect allegations in the FTC’s 2023 complaint that Celsius marketed itself as safer than a bank, promised withdrawals at any time and advertised yields as high as 18.63% annual percentage yield. The complaint also asserts the company told consumers it had sufficient reserves on June 7, 2022, five days before freezing withdrawals and transfers. Celsius filed for Chapter 11 bankruptcy on July 13, 2022.

The orders extend beyond the defendants’ prior roles at Celsius. They bar the same marketing and assistance in future positions and include activity performed through intermediaries. The reporting and recordkeeping requirements create mechanisms for regulators and the court to monitor compliance and pursue further enforcement if violations occur.