The past week brought significant developments in cryptocurrency-related legal cases across the United States, ranging from new asset seizures in the FTX case to a former CEO choosing self-representation and a city council taking a firm stance against crypto kiosks. Here is a breakdown of the most consequential events.
US Authorities Locate Additional $10 Million Tied to Sam Bankman-Fried
On Thursday, prosecutors in the Southern District of New York filed a motion seeking forfeiture of $10 million in newly located cash assets belonging to Sam Bankman-Fried, the former CEO of FTX. The funds were held in an account at Fiduciary Trust Company and, according to US Attorney Jay Clayton, represented the return of an investment Bankman-Fried made in the media outlet Semafor.
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Bankman-Fried was sentenced to 25 years in prison in 2024 after being convicted of defrauding FTX users and investors. The court ordered him to pay more than $11 billion in forfeiture, a judgment that Clayton noted remains unpaid while Bankman-Fried pursues an appeal. This latest seizure adds to the ongoing effort by authorities to recover assets for victims of the FTX collapse.
Alex Mashinsky Drops Legal Team, Will Represent Himself at Sentencing
Alex Mashinsky, the former CEO of Celsius Network, is now proceeding pro se after his lawyers moved to withdraw from the case on Wednesday. Mashinsky was sentenced to 12 years in prison for fraud and price manipulation at the crypto lending platform, which filed for bankruptcy in 2022 alongside FTX.
Meanwhile, Roni Cohen-Pavon, Celsius’ former chief revenue officer, is scheduled to be sentenced on May 13. Cohen-Pavon pleaded guilty in September 2023 and has cooperated with prosecutors. On May 4, US prosecutors recommended leniency, citing his substantial assistance to the government. The differing legal strategies highlight the varied paths defendants are taking as the Celsius case reaches its conclusion.
Why Self-Representation Matters in High-Profile Crypto Cases
Choosing to represent oneself in a federal criminal case is rare and often risky, particularly in complex financial fraud cases involving digital assets. Legal experts note that pro se defendants face significant procedural hurdles and lack the resources of a professional legal team. Mashinsky’s decision may reflect either a strategic move or a breakdown in attorney-client relations, but it adds another layer of uncertainty to an already lengthy legal process.
Washington City Passes Ban on Crypto Kiosks, Iowa Tightens Oversight
On Tuesday, the Spokane Valley City Council in Washington voted unanimously to ban virtual currency kiosks and ATMs within city limits. The ordinance, driven by a surge in crypto-related scams targeting residents, imposes a $250 civil penalty per violation and grants officials the authority to revoke business licenses of noncompliant operators. Entities have 30 days to remove or deactivate their machines.
Spokane Valley joins a growing list of municipalities that have enacted similar restrictions, reflecting mounting concern over the use of crypto kiosks in fraud schemes. The move follows reports of elderly residents and other vulnerable individuals losing life savings to scammers who instruct victims to deposit cash into these machines.
On Wednesday, Iowa Attorney General Brenna Bird announced that the state would establish rigorous oversight for crypto ATMs under a new law, SF2296. The legislation adds crypto kiosks to Iowa’s financial regulatory framework, empowering state authorities to impose civil penalties and seek injunctions against operators who violate consumer protection rules.
What These Regulations Mean for Crypto Users
For everyday crypto users, these restrictions may reduce the convenience of buying digital assets with cash. However, regulators argue that the measures are necessary to protect consumers from a rising tide of scams. The Federal Trade Commission reported that consumers lost more than $1.5 billion to crypto-related fraud in 2025, with kiosks being a common tool for scammers to extract funds from victims.
Conclusion
This week’s legal developments underscore the continuing fallout from the 2022 crypto market crash and the regulatory response that followed. From the recovery of FTX assets to the final stages of the Celsius case and new state-level restrictions on crypto kiosks, the field for digital assets in the United States remains in flux. Readers should monitor these cases closely, as they set precedents that could shape the future of crypto regulation and enforcement.
FAQs
Q1: What happens to the $10 million found in Sam Bankman-Fried’s account?
The US government has filed a motion to seize these funds as part of the $11 billion forfeiture order against Bankman-Fried. If approved, the money will go toward compensating victims of the FTX fraud.
Q2: Can Alex Mashinsky successfully represent himself in court?
While legally permitted, self-representation in complex financial fraud cases is highly challenging. Legal experts generally advise against it due to the procedural and substantive complexities involved.
Q3: Are crypto ATM bans spreading across the US?
Yes, several cities and states have enacted or are considering restrictions on crypto kiosks. The trend is driven by consumer protection concerns, particularly regarding scams targeting vulnerable populations.
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