New York Permanently Bars Celsius Founder Mashinsky in $35 Million Fraud Settlement

WHY IT MATTERS

Celsius was a company that worked somewhat like a bank for crypto — people deposited their cryptocurrency with Celsius, and Celsius promised to pay them interest on those deposits. However, unlike traditional banks, crypto lending platforms like Celsius were not covered by government deposit insurance (like FDIC insurance that protects bank accounts in the United States). When Celsius ran into financial trouble, customers could not withdraw their funds. Think of it like putting money in a savings account, only to find out the bank locked the doors and would not give your money back. New York regulators have now permanently banned the company's founder from the crypto industry in the state and imposed a large financial penalty. For newcomers to crypto, this case illustrates the importance of understanding the risks of entrusting funds to third-party platforms, especially those that are not subject to the same regulations and protections as traditional financial institutions.