The New York State Attorney General’s Office is suing former Celsius Network CEO Alex Mashinsky. He is accused of defrauding investors “for billions of dollars.”
I’m suing the former CEO of cryptocurrency platform @CelsiusNetwork for defrauding investors out of billions of dollars.
Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York.
— NY AG James (@NewYorkStateAG) January 5, 2023
“Mashinsky has repeatedly made false and misleading statements about the safety of Celsius […]distorted and concealed the deteriorating financial condition [платформы]”, — said in a departmental press release.
The requirement for the ex-head of the company is to compensate for losses and return funds to customers. There is also a requirement to ban doing business in the state. The report notes that the lawsuit was filed “on behalf of thousands of New Yorkers.”
“As the former CEO of Celsius, Alex Mashinsky promised investors financial freedom but led them down a path of financial ruin,” the authorities added.
As a reminder, on June 13, 2022, the crypto lender suspended withdrawals, exchanges and transfers between accounts. A month later, the platform filed for insolvency under Chapter 11 of the United States Bankruptcy Code. In September, Mashinsky left post of CEO of Celsius.
According to experts Financial Timesat the end of December, Celsius’s expenses for the conduct of the case, the payment of lawyers and consultants reached $53 million.