The New York State Attorney General’s Office filed suit against former Celsius Network CEO Alex Mashinsky, accusing him of defrauding investors of 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 repeatedly made false and misleading statements about Celsius’s safety, distorted and concealed the platform’s deteriorating financial condition», as stated in the department’s press release.
The office sought restitution for losses and the return of funds to customers, as well as a ban on doing business in the state. The filing notes that the suit was brought on behalf of thousands of New Yorkers.
«As the former Celsius CEO, Alex Mashinsky promised investors financial freedom, but led them to financial ruin», the authorities said.
On June 13, 2022, the crypto lender paused withdrawals, exchanges and transfers between accounts. A month later the platform filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
In September, Mashinsky left the post as Celsius’s chief executive.
According to the Financial Times, by the end of December Celsius’s expenditures on proceedings, paying lawyers and consultants had reached $53 million.
In December, Celsius Network asked the court to extend the deadline for creditors to file claims.
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