key takeaways
- New York Attorney General Letitia James today filed a civil lawsuit against former Celsius CEO Alex Mashinsky.
- James claims that Mashinsky defrauded investors by making false statements about the company’s financials.
- She is seeking restitution, damages, and to bar Mashinsky from doing business in New York again.
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Former Celsius CEO Alex Mashinsky is being sued by the New York attorney general for defrauding investors and making false statements about the company’s finances.
Mashinsky feels the heat
Alex Mashinsky finally faces consequences for his mishandling of Celsius.
New York Attorney General Letitia James filed a civil suit against the former CEO of Celsius earlier today. The filing accuses Mashinsky of making false statements to investors about Celsius’ financial condition.
“Alex Mashinsky lied to people about the risks of investing in Celsius, concealed his deteriorating financial situation, and failed to register in New York.” saying James in a Twitter post. She claimed that he had “defrauded” working people by promising them big profits, but had only left them “financial ruin”.
James said he was suing Mashinsky for restitution and damages, seeking to bar him from doing business in New York ever again. His office claims that 26,000 New Yorkers had deposited more than $440 million in Celsius as of December 31, 2021.
Once a leading crypto lending company, Celsius froze withdrawals of client funds in early June, citing “extreme market conditions.” The company subsequently declared bankruptcy; News was received to shock, outrage and suicide threats from customers, some of whom claimed to have lost their life savings on the platform.
Court filings later revealed that the company had a $1.19 billion hole in its balance sheet. Celsius experts have claimed the hole. was partly due to Mashinsky uses customer funds to trade BTC in a directional way, against the advice of several senior figures in the company. Mashinsky reportedly lost $50 million of company funds in January 2022 alone.
Months after filing for bankruptcy, Mashinsky He suggested change the name from Celsius to “Kelvin” and move forward with the company focusing on crypto-custody services. He resign shortly after.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other cryptocurrencies.
