Former Celsius Boss Alex Mashinksy Sued for Fraud
- Celsius filed for Chapter 11 bankruptcy in July 2022, locking up users’ funds.
- Mashinsky resigned from his role as CEO in September, claiming the position had become a distraction.
The former CEO of Celsius, Alex Mashinsky, is being sued by the attorney general of New York for misleading investors. Letitia James, the attorney general of New York, claimed on Thursday that Mashinsky promised to bring investors to economic freedom but “led them down a path of financial ruin.”
James, in a statement, alleged that Mashinsky defrauded “hundreds of thousands of investors… out of billions of dollars’ worth of cryptocurrency.” Mashinsky was also said to have “repeatedly made false and misleading statements about Celsius’ safety to encourage investors to deposit billions of dollars in digital assets onto the platform.”
Celsius was previously one of the biggest cryptocurrency lenders. However, the platform filed for bankruptcy protection mid last year. The crypto lender at the time said it had more than 100,000 creditors and an estimated $1 billion to $10 billion in assets and liabilities.
According to the Attorney General’s office, Celsius lost hundreds of millions of dollars through reckless investments, and Mashinsky deliberately concealed Celsius’ financial situation. Mashinsky also neglected to sign up with the site as a salesperson and as a dealer in securities and commodities.
The statement added that “Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses.”
The story is progressing and will be updated with more details.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
