key takeaways
- Celsius creditors filed a lawsuit against Alex Mashinsky and other Celsius executives.
- They are seeking to recover the millions that the executives allegedly collected before the company went bankrupt.
- The lawsuit comes on the heels of a report that claimed Celsius was operated in a similar fashion to Ponzi.
Share this article
Former Celsius executives (and their wives) now face a lawsuit from their creditors.
Lose more than $1 billion in a year
The walls are closing in on Alex Mashinsky.
centigrade creditors filed a 154-page lawsuit against Celsius executives yesterday for their fraudulent conduct at the head of the company. The lawsuit seeks to recover the millions that former CEO Alex Mashinsky and other prominent members of the company allegedly collected for themselves before the crypto lender went bankrupt.
The court document claims that Mashinsky, co-founder Daniel Leon, co-founder Nuke Goldstein, former CFO Harumi Urata-Thompson, former chief compliance officer Jeremie Beaudry and former head of the trading desk Johannes Treutler breached their fiduciary duties in a series of occasions He also points out that two of his spouses, Kristine Mashinsky and Aliza Landes, were also implicated.
“They made negligent, reckless (and sometimes selfish) investments that caused Celsius to lose more than $1 billion in a single year,” the creditors stated. The lawsuit further accused the group of inflating the price of the company’s CEL token with customer funds and subsequently cashing out millions of dollars by selling its own CEL holdings. And while other crimes appear to have been perpetrated by Mashinsky alone (using client funds to directionally trade bitcoins or making false statements about Celsius’s financial condition), creditors accused other executives of standing by “and doing nothing.” and “cover it up”.
The claims made in the lawsuit appear to be based in part on a 689-page, court-ordered document, independent report on Celsius published two weeks ago, in which examiner Shoba Pillay concluded that the crypto lending firm had been operated in a ponzi-like fashion.
New York Attorney General Letitia James also filed a lawsuit against Mashinsky in early January, accusing him of defrauding New Yorkers and leaving them in “financial ruin.”
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
