Celsius’ former co-founders are now facing additional financial consequences tied to the U.S. Federal Trade Commission’s case over what the regulator said were misleading assurances about the safety of customer assets before the crypto lender’s 2022 collapse.

The FTC has secured settlements in which Shlomi Daniel Leon and Hanoch “Nuke” Goldstein were ordered to pay a combined over $6 million to resolve FTC allegations that they misrepresented the security of the Celsius platform ahead of its bankruptcy filing. The latest orders follow the broader ripple effects of Celsius’ failure, which left users seeking recovery of funds after the firm, once valued on the promise of managed custody and lending, unraveled during a market downturn.

Key takeaways

• Goldstein, Celsius’ former chief technology officer, was ordered to pay $2.014 million under a court order signed Monday by U.S. District Judge Denise Cote.
• Leon, the former chief strategy officer, was ordered to pay $4.1 million under a separate stipulated order entered on June 29.
• The settlements extend FTC enforcement beyond CEO Alex Mashinsky, targeting additional executives’ alleged role in customer-facing representations.
• Both orders include restrictions barring the co-founders from marketing or selling products or services that could be used to deposit, exchange, invest, or withdraw crypto assets.
• The FTC previously alleged that Celsius misled customers about reserves, insurance coverage, and the nature of loans, and these settlements are credited toward related judgments.

Court-ordered payments and the scope of the bans

According to the FTC, the settlements with Goldstein and Leon are designed to address alleged consumer harm tied to the way Celsius presented its platform to retail customers. Judge Denise Cote’s order signed Monday requires Goldstein to pay $2.014 million. Leon’s stipulated order—entered on June 29—requires a larger payment of $4.1 million.

Beyond the monetary terms, the FTC’s statement notes that both co-founders agreed to restrictions aimed at reducing their ability to operate in ways connected to crypto custody and trading. In particular, the FTC said Leon is barred from marketing or selling products or services that could be used to deposit, exchange, invest, or withdraw assets. For Goldstein, the FTC describes a similar restriction covering retail products or services that could be used to buy, sell, deposit, withdraw, distribute, or trade cryptocurrency.

“Similarly, Goldstein has agreed to a ban on marketing or selling retail products or services that can be used to buy, sell, deposit, withdraw, distribute or trade cryptocurrency.”

FTC allegations: reserves, insurance, and loan practices

At the center of the FTC’s complaint was the claim that Celsius presented a picture of safety that, according to the regulator, did not match its actual conditions. The FTC alleged Celsius falsely told customers it maintained sufficient reserves to satisfy withdrawal demands.

The regulator also alleged Celsius promoted a $750 million insurance policy covering customer deposits, and represented that it did not issue unsecured loans.

The FTC further argued that these claims were made while Celsius’ executives continued to assure customers that deposits were safe in the final period before the platform collapsed. In the regulator’s framing, the alleged misrepresentations were not merely marketing mistakes; they were repeated assurances made during a period when the company’s financial situation was deteriorating.

How the settlements connect to the Mashinsky case

The settlements with Leon and Goldstein are part of an enforcement arc that began with the FTC’s action against Celsius founder and former CEO Alex Mashinsky, and then expanded to other executives. Earlier coverage of the Celsius fallout, including the trading restrictions placed on Mashinsky, underscored that regulatory scrutiny extended well beyond one individual once the company failed.

In April, Mashinsky agreed to an FTC settlement that included a permanent bar from promoting asset-related products and a $10 million payment. That settlement also involved a larger judgment framework described as $4.72 billion in a partially suspended structure, reflecting consumer harm allegations. Earlier reporting noted the settlement terms, including the $10 million payment and the partially suspended judgment.

The newly ordered payments from Goldstein and Leon—$2.014 million and $4.1 million, respectively—are stated to be credited against the $4.72 billion judgment. That matters because it shows how the FTC is coordinating multiple executive settlements into a single remedial accounting process, rather than treating each settlement as an isolated event.

Separately from the FTC track, the broader criminal fallout has also progressed. The U.S. Department of Justice previously reported that Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to commodities and securities fraud charges. Prosecutors said Mashinsky misled Celsius customers about the company’s profitability, investment risks, and the safety of customer funds.

Why these enforcement steps matter for Celsius customers and the industry

For Celsius users, the immediate takeaway is that the FTC’s case continues to identify and penalize senior figures beyond the most visible CEO at the time of collapse. The settlements do not reverse the bankruptcy outcome, but they do reinforce that the regulator intends to pursue accountability tied to marketing claims directed at retail customers.

For the broader crypto lending sector, these orders are another signal that “custody-and-lending” narratives—particularly those that reassure customers about reserves, insurance, and withdrawal readiness—are likely to remain under intense regulatory scrutiny. The bans also go beyond fines: they target future conduct by restricting marketing and sales roles connected to crypto deposit and trading functions.

What remains to be watched is how these settlements fit into the continued legal and enforcement landscape around Celsius and related claims. The crediting of co-founders’ payments against the $4.72 billion judgment suggests that additional financial outcomes may still surface as the FTC tallies and resolves separate executive-level actions tied to the same alleged consumer harm.

Going forward, investors and customers should pay attention to two things: whether additional Celsius executives face similar settlement-driven restrictions, and how courts continue to reconcile multiple payments under the same FTC judgment framework—especially as regulators seek to close gaps between public assurances and the actual condition of crypto lending platforms before collapses.

Polymarket has referred nearly 100 suspicious crypto wallets to law enforcement as the prediction market platform expands its monitoring of possible insider trading.

The referrals come as a Bloomberg analysis of Polysights data found that about $200 million in Polymarket trades during the first half of 2026 showed characteristics associated with “potential insider activity.” 

Much of the flagged activity involved geopolitical markets tied to Iran and Venezuela. The data does not prove that every flagged trade involved illegal conduct, but it shows the volume of activity now facing closer review as prediction markets draw more regulatory attention.

Polymarket expands surveillance as suspicious trades rise

Polymarket Chief Legal Officer Neal Kumar said the company’s internal process had resulted in nearly 100 wallet referrals to authorities. The platform has also strengthened surveillance as regulators examine whether traders may have used confidential information to gain an advantage in event contracts. Because Polymarket records transactions on a public blockchain, investigators can trace wallet activity, funding flows and trading patterns even when users trade through pseudonymous addresses.

The Bloomberg review relied on Polysights data that identified trades with features associated with possible informed activity. Analysts can examine signals such as newly created wallets, unusually concentrated positions and trades placed shortly before major events. 

Those signals can direct attention toward accounts that deserve further review. However, a “suspicious” label does not establish insider trading, and a referral does not mean authorities will file charges.

In addition, the growing scrutiny follows a U.S. case involving Army Master Sergeant Gannon Ken Van Dyke. As previously reported by crypto.news, the Department of Justice accused Van Dyke of using classified information about a U.S. military operation targeting Venezuelan President Nicolás Maduro to place Polymarket trades. Prosecutors said he made about $409,881 after placing more than $33,000 in bets linked to Maduro’s removal.

The CFTC filed a parallel case, while the Justice Department brought charges tied to the alleged use of classified information. The case provides one of the clearest examples of authorities treating prediction-market activity as part of a broader criminal investigation. It also shows why wallet referrals can matter: on-chain records can preserve a visible trading trail even when the public does not know the trader’s identity when the transactions occur.

Google-linked case adds to insider-trading concerns

A separate case involved a Google engineer accused of using unreleased company data to trade on Polymarket. As crypto.news reported in May, U.S. prosecutors and the CFTC charged Michele Spagnuolo over allegations that he used confidential Google search trend information to place about $2.7 million in prediction-market wagers. Authorities said the trades generated about $1.2 million in profit.

That case broadened the focus beyond military and government information. It showed that prediction markets can attract traders with access to private corporate data as well as sensitive state information. The allegations also raised questions about how platforms monitor markets whose outcomes depend on information controlled by a small group of employees, officials or contractors.

Iran markets bring geopolitical trading under closer review

Geopolitical markets have drawn some of the strongest scrutiny in 2026. More than $529 million traded on Polymarket markets tied to the timing of strikes on Iran, while several newly created wallets drew attention after making profitable positions before major events. Six Democratic senators later urged the CFTC to restrict contracts tied to death, citing national security and public safety concerns.

The Bloomberg analysis places those earlier cases within a wider pattern. According to the Polysights data, many flagged trades involved markets linked to Iran and Venezuela. Polymarket’s decision to refer nearly 100 wallets shows a more active surveillance approach, although the company has not said that every referred wallet broke the law or used nonpublic information.

Prediction markets also face wider regulatory pressure. As crypto.news reported on July 19, France ordered internet service providers to block Polymarket after regulators cited unauthorized gambling, weak identity checks and concerns about market integrity. The Czech Republic has also restricted access, while European regulators continue to examine whether some event contracts fall under existing financial rules.

Lawmakers designed most insider-trading rules around securities markets, while prediction contracts can cover politics, military operations, technology and corporate data. That makes enforcement more complex when traders use information that the public cannot access. 

Polymarket’s referrals give authorities wallet-level data to review, but investigators still need evidence connecting specific trades to unlawful use of confidential or classified information.

Loyalty programs have been around for decades. From airline miles and hotel points to coffee shop punch cards and retail rewards, businesses have long relied on incentives to keep customers coming back. However, traditional loyalty systems often suffer from limited flexibility, poor transparency, expiration rules, and rewards that are difficult to redeem.

Blockchain technology is changing that.

By bringing transparency, security, and interoperability to reward systems, blockchain-based loyalty programs are creating a more engaging experience for both businesses and consumers. Instead of locking rewards inside a single ecosystem, blockchain allows digital loyalty assets to become more flexible, secure, and valuable.

What Is a Blockchain Loyalty Program?

A blockchain loyalty program is a customer rewards system that records loyalty points, memberships, or digital rewards on a blockchain instead of a centralized database.

Customers still earn rewards by making purchases, completing tasks, or participating in promotions, but the rewards are stored as blockchain-based digital assets that are verifiable and secure.

Unlike traditional databases that are controlled by one company, blockchain creates an immutable record of every reward earned and redeemed.

Why Traditional Loyalty Programs Fall Short

Most loyalty systems have several common problems:

• Points expire unexpectedly.
• Rewards cannot be transferred.
• Customers struggle to track balances.
• Fraud and duplicate rewards occur.
• Programs are isolated from one another.
• Redemption options are often limited.

Many consumers forget they even have reward points because accessing them is inconvenient.

Blockchain addresses many of these challenges.

How Blockchain Improves Loyalty Programs

1. Transparent Rewards

Every reward transaction is recorded on-chain.

Customers can independently verify:

• Points earned
• Reward history
• Redemptions
• Bonus campaigns

This transparency builds trust between brands and customers.

2. Improved Security

Blockchain significantly reduces the risk of:

• Account manipulation
• Duplicate rewards
• Fraudulent redemptions
• Unauthorized balance changes

Since blockchain records cannot easily be altered, businesses gain a more secure infrastructure for managing rewards.

3. True Ownership

Instead of existing only inside a company’s private database, blockchain-based loyalty assets can be owned directly by users through their digital wallets.

Customers have greater control over their rewards rather than relying entirely on centralized systems.

4. Cross-Brand Interoperability

One of blockchain’s biggest advantages is interoperability.

Imagine earning rewards from:

• An airline
• A hotel
• A restaurant
• A ride-sharing app

Instead of maintaining four separate point systems, blockchain could allow these rewards to interact within a shared ecosystem.

Customers gain more flexibility while businesses expand their reach through partnerships.

5. Instant Redemption

Traditional loyalty systems often require:

• Manual approvals
• Delayed processing
• Customer support intervention

Blockchain enables near-instant verification and redemption through smart contracts.

The result is a smoother customer experience.

Tokenized Loyalty Points

Some blockchain loyalty programs tokenize rewards.

Rather than simple database entries, loyalty points become blockchain tokens.

These tokens may allow users to:

• Redeem products
• Access premium memberships
• Unlock exclusive experiences
• Participate in community events
• Receive discounts
• Earn additional rewards through staking mechanisms

Not every loyalty token is tradable, but tokenization opens many possibilities beyond traditional reward systems.

NFTs in Loyalty Programs

Non-fungible tokens (NFTs) introduce another layer of customer engagement.

Brands can issue NFTs that represent:

• VIP memberships
• Lifetime customer status
• Event tickets
• Limited-edition collectibles
• Special access passes
• Exclusive product launches

Unlike traditional membership cards, NFTs can include programmable benefits that automatically unlock perks when owned by a customer.

Smart Contracts Automate Rewards

Smart contracts eliminate much of the manual work involved in loyalty programs.

They can automatically:

• Award points after purchases
• Trigger bonus campaigns
• Validate eligibility
• Process redemptions
• Prevent duplicate claims

Automation reduces operational costs while improving customer satisfaction.

Benefits for Businesses

Blockchain loyalty programs provide several business advantages.

Lower Fraud

Immutable records reduce reward abuse.

Better Customer Retention

Flexible rewards encourage repeat engagement.

Reduced Administrative Costs

Automation minimizes manual management.

Richer Customer Engagement

Digital collectibles and tokenized experiences create stronger emotional connections.

Easier Partnerships

Multiple brands can collaborate through shared blockchain infrastructure.

Benefits for Consumers

Customers enjoy several improvements.

• Greater transparency
• Faster reward redemption
• Increased security
• Digital ownership
• More valuable rewards
• Cross-platform usability
• Personalized experiences

Instead of forgetting points inside dozens of accounts, users can potentially manage rewards from multiple brands in a single wallet.

Real-World Use Cases

Blockchain loyalty is already appearing across multiple industries.

Retail

Reward tokens for purchases and referrals.

Travel

Airline and hotel points with broader redemption options.

Food & Beverage

Digital memberships and collectible reward NFTs.

Gaming

Cross-game loyalty rewards and digital collectibles.

Entertainment

Concert tickets combined with long-term fan rewards.

E-commerce

Tokenized cashback and loyalty incentives.

Challenges Still Exist

Despite its advantages, blockchain loyalty programs still face several hurdles.

User Experience

Wallet setup and blockchain interactions remain unfamiliar to many consumers.

Regulation

Different jurisdictions have varying rules for digital assets and tokenized rewards.

Scalability

Large consumer brands require networks capable of processing millions of transactions efficiently.

Education

Many customers still do not understand blockchain technology, making onboarding a challenge.

As blockchain infrastructure matures, these barriers are expected to diminish.

The Future of Loyalty

The next generation of loyalty programs may become far more personalized and interconnected.

Future systems could enable customers to:

• Carry loyalty rewards across multiple brands.
• Receive personalized incentives powered by AI.
• Earn rewards for both online and offline activity.
• Access exclusive communities through digital memberships.
• Trade or combine rewards across participating ecosystems.
• Interact with brands through gamified experiences.

Rather than simply collecting points, customers will increasingly participate in digital ecosystems where loyalty becomes an interactive and valuable asset.

Conclusion

Blockchain loyalty programs are transforming how businesses build lasting relationships with customers. By combining transparency, automation, security, and digital ownership, they address many of the limitations of traditional reward systems.

As adoption grows, loyalty points may evolve from isolated database entries into versatile digital assets that can be used across multiple brands and experiences. For companies, this creates new opportunities to deepen engagement and foster long-term customer relationships. For consumers, it means rewards that are more accessible, flexible, and meaningful.

In the years ahead, blockchain-powered loyalty programs are poised to become a key component of the digital economy, reshaping customer engagement in ways that traditional systems simply cannot.

REQUEST AN ARTICLE

VIETNAM

Vietnam goes after the little guys

Vietnam will fine retail crypto users up to $1900 if they trade on unlicensed overseas platforms such as Binance, OKX and Bybit, instead of on licensed local exchanges.

There’s just one problem: Vietnam’s Finance Ministry has yet to issue any exchange licenses for its regulated digital asset market which is due to start on September 1. Five exchanges have been approved in principle however.

Domestic investors who trade crypto that’s been designated exclusively for foreign investors can be fined up to $3800. Crypto companies providing or advertising services without a license, those who fail to properly ID customers, or unlawfully deal with crypto account data, can be fined up to $7600.

MALAYSIA
Network school dragged into Israeli citizen controversy 

Balaji Srinivasan’s utopian Network School in Forest City, Malaysia is under fire over allegations it has been hosting Israeli citizens using second passports.

The claims trace back to an activist group Malaysia Protest 4 Palestine, which has accused the school of becoming a “gathering place for Israeli entrepreneurs.”

In other countries such a kerfuffle might result in a few BDS protesters or a boycott, but Malaysia has no diplomatic relations at all with Israel, and bans Israeli citizens from even visiting.

That said, dual nationals with Israeli passports are allowed… for now, although the controversy suggests that particular loophole may be closed soon.

Vitalik, Bryan and Balaji at the Network School. (X)

The incident made international headlines after Srinivasan threatened to pull the Network School and its millions in investments out of the country. 

The Immigration Department said its investigation had found the 266 foreigners have valid documents, while the Johor state government is plowing ahead with a probe to ensure compliance with regulations on business licenses, building usage and commercial operations.

Ironically, the Network School is based on the concept of online network states, which are meant to be above such petty IRL squabbles.  

JAPAN

Japan reclassifies crypto as financial assets

The Japanese parliament has passed revisions to the Financial Instruments and Exchange Act and now classifies cryptocurrencies as financial assets. 

The move takes crypto regulations out of the Payment Services Act and comes with a mixed bag of tax benefits along with harsher fines and regulations that befit crypto’s new status up there alongside TradFi assets.

Source: Reuters, X.

Unlicensed crypto platforms face a fine of 10 million yen or 10 years in jail and there’s a new ban on insider trading in crypto that will be policed by the Securities and Exchange Surveillance Commission.

On the upside, current crypto tax rates of up to 55% will be slashed to approximately 20%, with a three year carry forward provision for any losses… which neatly lines up with a bull run every fourth year.

Unfortunately the new tax rules don’t come into effect until 2028.

SOUTH KOREA

South Korea adds crypto to public wealth management rules

South Korea has proposed updating its national asset management scheme to include crypto and IP under the definition of “national assets.”

The Ministry of Economy and Finance announced it is rewriting the 1950 State Property Act, as the National Asset Basic Act, which would make it the first national sovereign asset management statute to embed cryptocurrency. 

The existing law was built around an economy focused on real estate which no longer reflects the range of assets the government holds. The new framework also changes the emphasis from managing assets to instead generating value from them. So perhaps we’ll see the Korean Government yield farming on Aave one day soon.

More news from Korea

— South Korea’s Financial Supervisory Service (FSS) has begun sanction procedures against Upbit operator Dunamu, after the platform was hacked for $30 million in November. FSS has been investigating to determine if the incident violated the Virtual Asset User Protection Act, however that law doesn’t provide sanctions for hacks or IT failures. 

— That particular oversight is expected to be addressed in the forthcoming Digital Asset Basic Act. Legislators have finally restarted talks on the new act after four months. 

— Korea’s Financial Services Commission is extending victim compensation schemes to cover crypto scams. 

— Weekly trading volume on Korea’s five top exchanges has more than halved since early June to just 8 trillion won.

— The Bank of Korea will expand its Project Hangang CBDC pilot to nine banks. Phase two, which kicks off in September, also adds biometric payments and person to person transfers.

— Officials from South Korea’s National Tax Service have proposed changing the law to establish clear procedures for seizing self hosted crypto wallets during investigations. 

— Consensys unwittingly hired a North Korean dev and gave him access to Metamask’s code. It says an investigation didn’t uncover any security issues.

CHINA and HONG KONG

Is Coinbase allowing Chinese users to verify?

Wu Blockchain reports that Coinbase has opened up verification for users who are solely based in China. Previously Chinese users needed to provide a Hong Kong address, but they can now reportedly verify on the platform using only a Chinese ID card and a Chinese address. However, China still does not appear in Coinbase’s list of supported countries. 

— Hong Kong has approved its first crypto native tokenized fund from Baillie Gifford, that allows professional investors to have direct ownership of assets on the blockchain.  

INDONESIA

— Bybit is launching a regulated platform in Indonesia, following its acquisition of the local NOBI exchange. It will retain NOBI’s senior management team to run the Bybit Indonesia operation.