A US federal court entered settlement orders in July 2026 requiring Alex Mashinsky, Shlomi Daniel Leon, and Hanoch Goldstein, co-founders of Celsius Network Inc., to pay a combined $16.5 million to resolve Federal Trade Commission charges. The FTC filed the original complaint in 2023 alleging violations of Section 5(a) of the FTC Act and the Gramm-Leach-Bliley Act. Celsius filed for Chapter 11 bankruptcy in July 2022, and customer claims were resolved through the subsequent reorganisation plan. The settlement is a civil resolution and does not affect criminal proceedings brought separately against Mashinsky by the Department of Justice.
The FTC alleged violations of Section 5(a) of the FTC Act, which prohibits unfair or deceptive acts or practices in or affecting commerce. Mashinsky must pay $10 million, Leon $4.1 million, and Goldstein $2.4 million. Each respondent is prohibited from marketing or selling any product or service enabling consumers to deposit or withdraw assets, making material misrepresentations about any financial product, and violating the Gramm-Leach-Bliley Act. The FTC charged that Celsius falsely represented it held a $750 million insurance policy for deposits, maintained sufficient reserves, and offered up to 18% annual interest on its Earn product.
The settlement establishes that co-founders and senior executives of crypto lending platforms face direct personal liability for consumer-facing misrepresentations made through the platform. Custodial crypto lending platforms and yield-bearing deposit products face heightened FTC scrutiny for representations about deposit safety, insurance, liquidity, and yield. Operators of retail-facing crypto yield products must substantiate all claims about reserve levels, insurance coverage, and withdrawal availability before making them to customers.
Mashinsky's criminal prosecution by the Department of Justice remained pending at the time of the FTC settlement. The settlement orders do not constitute an admission of wrongdoing. The Gramm-Leach-Bliley Act prohibition applies to future activities at any financial institution and is not limited to crypto services. Whether the FTC will seek comparable personal-liability orders against executives of other failed crypto platforms is an open question.
Licentium advises crypto lending platforms, yield-product operators, and exchange executives on FTC compliance, consumer protection disclosures, and regulatory risk management through a US counsel partner network. Contact us to discuss platform structuring, consumer disclosure review, or regulatory exposure assessment. Work we undertake includes crypto platform consumer protection reviews, FTC compliance audits, terms of service analysis, custody structuring advice, and regulatory risk assessments.