Author: CryptoSlate
Compiled by Deep潮 TechFlow
Shenchao Summary: The three founders of the bankrupt Celsius have been permanently barred by the FTC from engaging in core crypto activities such as deposits, withdrawals, and trading—a ban far more lethal than the $16.5 million fine, as it follows them personally and cannot be escaped even by switching companies. Even more ironic is that the fine can be offset using assets previously seized by the Department of Justice and funds from bankruptcy liquidation, meaning they may not have to pay a single dollar out of pocket.
The co-founder of the bankrupt crypto lending platform Celsius now faces a permanent court injunction prohibiting him from engaging in most areas of the crypto and asset services industry.
The FTC set the merger obligation for the founders at $16.5 million, but Goldstein's judgment specifies $2.014 million.
Alexander Mashinsky and Shlomi Daniel Leon shall not advertise, market, promote, offer, distribute, or assist in any such activities for products or services used to deposit, exchange, invest, or withdraw assets.
Mashinsky’s restriction covers general assets, while Leon’s restriction explicitly includes cryptocurrencies, banking, and financial assets. Both restrictions apply to actions taken directly by them or through intermediaries.
Goldstein's injunction focuses on retail cryptocurrency businesses. He is prohibited from advertising, marketing, promoting, or selling retail products or services used for buying, selling, depositing, withdrawing, distributing, or trading cryptocurrencies, as well as from assisting in such sales and marketing activities.
The three prohibitions also ban material false statements about products and services. They prohibit obtaining or attempting to obtain customer information from financial institutions, including bank account details, login credentials, private keys, and wallet information, through false, fictitious, or fraudulent statements.
Mashinsky and Leon must also obtain explicit, informed consent before disclosing consumers' non-public personal information.
These restrictions are consistent with the actions alleged by the FTC in its 2023 complaint. The agency accused Celsius of being marketed as safer than banks, promising instant withdrawals, and advertising yields as high as 18.63%.
The FTC also alleged that the company claimed to have sufficient reserves on June 7, 2022, only to freeze withdrawals and transfers five days later. Celsius filed for bankruptcy on July 13, 2022.
These bans follow the founders beyond Celsius and also cover any assistance they provide to others. The bans on Mashinsky and Leon extend to work done through intermediaries.
Over the coming years, the founders must submit reports and maintain records to provide the FTC with tracking information and give the court a basis for enforcing the injunctions. These injunctions apply to the three founders, illustrating how consumer protection cases can impose lasting restrictions on marketing托管, yield offerings, and trading products.
Funds seized by the Department of Justice and paid through the Celsius bankruptcy settlement can be applied toward the $16.5 million obligation.
Mashinsky’s $10 million obligation may be satisfied through eligible Department of Justice forfeitures. Leon’s $4.1 million obligation and Goldstein’s $2.014 million obligation may be offset by payments or releases in the Celsius bankruptcy proceedings.
Legal channels are separate but economically overlapping, and these bans do not guarantee additional compensation for Celsius creditors.
The funds actually received by the FTC may be used for consumer restitution or related relief; funds not used for relief will be deposited into the U.S. Treasury.