The Federal Trade Commission (FTC) announced that the founders of collapsed cryptocurrency platform Celsius Network will pay a combined $16.5 million to resolve allegations that they misled consumers about the safety of customer deposits. The settlements involve former CEO Alexander Mashinsky, former Chief Strategy Officer Shlomi Daniel Leon, and former Chief Technology Officer Hanoch “Nuke” Goldstein. According to the FTC, the executives falsely assured customers that funds deposited with Celsius were safe, secure, and always available for withdrawal, even as the company’s financial condition deteriorated.
FTC Alleged Consumers Were Misled
The FTC first filed its case against Celsius and its executives in 2023, alleging the company marketed itself as a safer alternative to traditional banks while making misleading claims about its lending practices, reserves, and risk management. Regulators said many customers believed their cryptocurrency deposits were protected when, in reality, Celsius engaged in risky business practices that ultimately contributed to its collapse. Celsius filed for bankruptcy in 2022 after freezing customer withdrawals, leaving many investors unable to access their funds.
Settlement Includes Industry Restrictions
Under the settlement orders, Mashinsky will pay $10 million, Leon will pay $4.1 million, and Goldstein will pay $2.4 million, totaling $16.5 million. In addition to the financial penalties, the founders are barred from marketing or selling many cryptocurrency-related products and services in the future. The FTC said the restrictions are intended to help prevent similar conduct and protect consumers from deceptive practices in the digital asset marketplace.
A Reminder About Cryptocurrency Risks
While the settlements close the FTC’s consumer protection claims against the founders, they also serve as a reminder that cryptocurrency investments often lack many of the safeguards associated with traditional financial institutions. Investors should carefully evaluate claims about safety, guaranteed returns, or easy access to deposited funds before committing money to any digital asset platform. Consumers who believe they may have been affected by the Celsius collapse should monitor official FTC and bankruptcy updates for information about ongoing proceedings or potential relief.
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Amanda Blankenship is the Chief Editor for District Media. With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.