Former CEO and Co-Founder of crypto lending platform Celsius, Alex Mashinsky, has had a lawsuit filed against him from New York Attorney General Letitia James for allegedly “defrauding hundreds of thousands of investors”.
Mashinsky is accused of defrauding customers out of billions of dollars worth of cryptocurrency, as well as making false and misleading claims regarding Celsius’s financial health and investor protection.
Attorney General James is now seeking to ban Mashinsky from doing business within New York whilst also requiring the ex-Celsius CEO to pay damages, restitution, and disgorgement to affected customers.
Celsius recently filed for Chapter 11 bankruptcy after being plagued by financial issues. The troubled crypto platform was also accused of similar false and misleading accusations last September by the Vermont Department of Financial Regulation.
The New York Office’s statement on Mashinsky outlines that he and Celsius lost “hundreds of millions of dollars of assets in risky investments”, which Mashinsky, being the face and spokesperson of the company, ultimately concealed from customer knowledge.
Attorney General James revealed that Mashinsky would state repeatedly that Celsius was “safer than a bank” and made several other false and deceptive statements.
She continued: “As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin.
“The law is clear that making false and unsubstantiated promises and misleading investors is illegal. Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses.
“My office will stay vigilant and ensure that bad actors trying to take advantage of New York investors are held accountable.”
In addition to banning Mashinsky from any business-related practices in New York, Attorney General James also seeks to stop the former Celsius CEO from serving as a Director or Officer of any New York company.
The lawsuit will be handled by Assistant Attorney Generals Tanya Trakht and Jesse Devine, along with Senior Enforcement Counsel Matthew Woodruff of the Investor Protection Bureau.