• The New York attorney general has filed a lawsuit against Celsius Network’s former CEO Alex Mashinsky for allegedly defrauding investors.
• Mashinsky allegedly misled customers by using false and misleading representations to induce them into depositing billions of dollars with Celsius Network LLC.
• The motion seeks to prevent Mashinsky from engaging in any business relating to the issuance, advertisement, or sale of securities or commodities in New York, as well as directing Mashinsky to pay damages, restitution, and disgorgement.
On Wednesday, New York Attorney General Letitia James filed a lawsuit against Alex Mashinsky, the former CEO of Celsius Network LLC for allegedly defrauding investors. According to the lawsuit, Mashinsky used false and misleading representations to induce hundreds of thousands of investors into depositing billions of dollars in digital assets with the cryptocurrency lending company between 2018 and at least June 2022.
Mashinsky was the “public face” of Celsius and promised investors high yields with minimal risk. However, when Celsius failed to generate sufficient revenue to pay the promised yields on investors’ deposits, they allegedly adopted significantly riskier investment strategies. The motion seeks to prevent Mashinsky from participating in any business relating to the issuance, advertisement, or sale of securities or commodities in New York, as well as directing Mashinsky to pay damages, restitution, and disgorgement.
The motion is a part of the Attorney General’s ongoing efforts to protect New York investors from fraud and abuse in the crypto industry. As the Attorney General noted, “New Yorkers who invest their hard-earned money in digital assets deserve to know that they are dealing with honest and reliable companies.” As a result, they are taking legal action against Mashinsky to ensure that investors are not taken advantage of in the future.