SKN | Celsius Co-Founders Ordered to Pay Over $6 Million in FTC Settlement

• Celsius co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein have agreed to pay more than $6 million to settle Federal Trade Commission (FTC) allegations.
• The settlements stem from claims that Celsius misrepresented the safety of customer funds before its 2022 collapse.
• Both executives are permanently barred from marketing certain cryptocurrency-related financial products.
• The agreements follow former CEO Alex Mashinsky’s earlier $10 million FTC settlement and criminal conviction.

The fallout from the collapse of cryptocurrency lender Celsius Network continues as co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein have agreed to pay more than $6 million to resolve allegations brought by the US Federal Trade Commission (FTC).

Under court-approved settlements, Goldstein, the company’s former chief technology officer, will pay approximately $2.014 million, while Leon, Celsius’ former chief strategy officer, will pay $4.1 million.

The settlements were approved through separate federal court orders and represent another chapter in the regulatory actions that followed one of the cryptocurrency industry’s most significant failures.

Regulators Alleged Customers Were Misled

The FTC accused Celsius and its senior executives of making misleading statements regarding the company’s financial condition and the security of customer assets.

According to regulators, Celsius claimed it maintained sufficient reserves to satisfy customer withdrawals, carried a $750 million insurance policy protecting deposits and avoided issuing unsecured loans.

The FTC alleged those representations were inaccurate and that company executives continued assuring customers that their assets were safe even as Celsius faced mounting financial difficulties shortly before filing for bankruptcy.

The agency argued these statements contributed to significant consumer losses when withdrawals were frozen and the company ultimately collapsed.

Restrictions Extend Beyond Financial Penalties

In addition to the monetary settlements, both executives agreed to broad restrictions on future business activities involving digital assets.

Leon is permanently prohibited from marketing or selling products or services that facilitate the depositing, investing, exchanging or withdrawal of financial assets.

Goldstein accepted similar restrictions preventing him from promoting or selling retail products related to purchasing, trading, transferring or holding cryptocurrency.

The FTC said the bans are intended to protect consumers from future misconduct involving digital asset investment products.

Mashinsky Case Continues to Shape Celsius Fallout

The settlements build on earlier enforcement actions against former Celsius Chief Executive Officer Alex Mashinsky.

Earlier this year, Mashinsky reached a $10 million settlement with the FTC as part of a much larger judgment tied to alleged consumer harm.

The payments made by Leon and Goldstein will be credited toward the broader $4.72 billion judgment associated with the FTC’s case.

Separately, Mashinsky was sentenced to 12 years in federal prison after pleading guilty to commodities and securities fraud charges related to misleading customers about Celsius’ financial health, investment strategy and the safety of customer deposits.

Celsius Remains One of Crypto’s Largest Failures

At its peak, Celsius managed approximately $25 billion in assets before its business unraveled during the cryptocurrency market downturn of 2022.

When the company filed for bankruptcy in July 2022, it reportedly owed customers approximately $4.7 billion, leaving thousands of users unable to immediately access their funds.

The collapse became a defining moment for the cryptocurrency lending industry and prompted increased regulatory scrutiny of centralized digital asset platforms worldwide.

Outlook

The latest FTC settlements reinforce regulators’ continued focus on executive accountability following major cryptocurrency company failures. As authorities pursue enforcement actions against former industry leaders, the Celsius case remains a landmark example of the legal and financial consequences that can result from misleading disclosures and inadequate risk management in the digital asset sector.