FTC Orders Celsius Founders To Pay $16.5 Million Over Crypto Deposit Claims
A July 20 Federal Trade Commission settlement puts $16.5 million in Celsius founder payments alongside bans on deposit and crypto-trading products, with court approval still required.
A $16.5 million FTC settlement turns the Celsius Network case from a collapsed crypto-lending platform into a personal-liability warning for fintech founders.
The Federal Trade Commission announced the orders on July 20, tying the penalty to allegations that former Celsius executives falsely assured users their deposits were safe and always available.
The enforcement action is narrower than a market-wide crypto rule, but it cuts directly into deposit-style claims that made Celsius look bank-like to consumers.
The orders attach individual payment obligations and product-marketing bans to Alexander Mashinsky, Shlomi Daniel Leon and Hanoch Goldstein, rather than only to the defunct platform.
FTC Orders Split The $16.5 Million Penalty
The FTC order requires Mashinsky, the former Celsius chief executive, to pay $10 million.
The same settlement package puts Leon's payment at $4.1 million and Goldstein's at $2.4 million.
The payment split gives the case a founder-level compliance consequence.
Mashinsky and Leon agreed to bans on marketing or selling products and services that can be used to deposit, exchange, invest or withdraw assets.
Goldstein agreed to a ban covering retail products or services used to buy, sell, deposit, withdraw, distribute or trade cryptocurrency.
The restrictions define the compliance consequence for fintech and digital-asset firms.
A product may describe yield, custody or access, but consumer-protection liability can reach executives personally when a regulator treats user-fund promises as deceptive.
Celsius Claims Centred On Safety And Access
The FTC's July 2023 complaint alleged that Celsius and its co-founders promoted the platform as safer than a bank or other traditional financial institutions.
The complaint also alleged that Celsius misrepresented how it earned profits, including claims that it made secured loans to other exchanges at no risk to consumers.
The deception case centred on specific user-facing promises.
Celsius communications presented withdrawals as available at any time, identified a $750 million deposit insurance policy, portrayed reserves as sufficient for customer obligations and promoted Earn programme rewards as high as 18% annual percentage yield.
The complaint also put unsecured lending at the centre of the case.
The FTC alleged that Celsius executives continued to represent customer deposits as safe days before the company filed for bankruptcy, even as the agency treated those assurances as false.
Court Approval Still Sets The Legal Finish
The orders add privacy and financial-information restrictions beyond the marketing bans.
Mashinsky and Leon cannot disclose nonpublic personal information about consumers without the consumer's express informed consent.
The Gramm-Leach-Bliley Act also appears in the settlement terms.
The orders prohibit violations involving customer financial information, including attempts to obtain it through false, fictitious or fraudulent representations.
Court approval remains the settlement package’s legal condition.
The proposed orders are before the U.S. District Court for the Southern District of New York and become binding only after approval and signature.
