Celsius co-founders Nuke Goldstein and Mashinsky Leon will pay over $6 million combined to settle with the FTC, following the regulatory agency's enforcement action against the defunct lending platform. The settlements arrive months after former CEO Alex Mashinsky agreed to pay $10 million in April, bringing total FTC penalties against Celsius leadership to roughly $16 million.
The FTC targeted Celsius for deceptive marketing practices and misrepresenting the safety of customer deposits. The platform collapsed in June 2022, freezing $8 billion in customer assets and leaving depositors unable to access their funds during bankruptcy proceedings. The regulator alleged Celsius falsely advertised yields and safety guarantees while obscuring the actual risks users faced.
Goldstein and Leon's individual settlements reflect their roles in the company's misleading promotional campaigns. The FTC has pursued separate enforcement actions against each founder rather than a unified settlement, suggesting differentiated liability findings. These settlements require the co-founders to pay restitution and accept injunctions preventing future violations of consumer protection laws.
The enforcement action represents part of a broader regulatory crackdown on yield-bearing crypto products that operate in regulatory gray zones. The FTC has aggressively pursued cases involving platforms that marketed high returns without clear disclosure of underlying risks or custody mechanisms. Celsius marketed yields as high as 18.63 percent, claims the FTC determined lacked sufficient risk warnings.
The settlements carry no admission of wrongdoing, a standard clause in most regulatory settlements. However, the payments signal the FTC's determination to hold individual founders personally liable for corporate misconduct, not just the companies themselves. This approach aims to deter similar deceptive practices across the broader crypto lending sector.
Celsius's bankruptcy proceedings continue, with creditors and claimants awaiting distribution plans. The platform's collapse triggered investigations into whether executives properly managed customer