Former Celsius Network CEO Sued For Defrauding Its Investors!

Former Celsius Network CEO Sued For Defrauding Its Investors! 

Founder and former CEO of the now bankrupt Crypto lender Celsius Network is being sued by a New York Attorney General for lying and duping its investors.

The Lawsuit

On Thursday, New York Attorney General Letitia James posted a statement on Twitter accusing Celsius founder Mashinsky of having defrauded investors out of billions of dollars. James argues that Mashinsky “lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York.”

“Mashinsky tricked hardworking people into investing their life savings into Celsius, promising big financial returns and claiming the platform was safer than a bank. Instead, Celsius collapsed and New Yorkers were left in financial ruin.” James stated.

If the lawsuit is successful, not only will Mashinsky have to pay a hefty fine to repay former Celsius investors, but he will also be barred from doing any type of business in New York entirely.

“I’m suing to get New Yorkers their money back and ban Mashinsky from doing business in New York.” James wrote, “We will continue to protect people from the risks of investing in cryptocurrency.”

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In response to these allegations, Mashinsky’s attorney Benjamin Allee, said his client “denies these allegations” and that Mashinsky “looks forward to vigorously defending himself in court”.

Celsius’ Collapse

Celsius Network was once considered to be one of the biggest crypto lenders in the space before “extreme market conditions” forced the firm to halt all withdrawals from its platform in June 2022 before filing for bankruptcy in mid July. 

In their bankruptcy filing, Celsius reported that they had approximately 600,000 accounts on their platform which held a total value of around $4.2 billion by July 10th. They also noted that the company had more than $5 billion in liabilities.

Mashinsky later resigned from his position as Celsius’ CEO in September, saying he was “very sorry about the difficult financial circumstances members of our community are facing.”

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