Summary:
- Attorney General Letitia James accused Alex Mashinsky of leading investors “down a path of financial ruin”.
- James’ lawsuit seeks to ban Celsuis’ Founder Mashinsky from doing business in New York and secure restitution for aggrieved customers.
- Mashinsky stepped down as CEO in September 2022 amid over $1.2 billion in bankruptcy claims from creditors.
Former Celsius CEO Alex Mashinsky is being sued for fraud by New York Attorney General Letitia James. According to Attorney General James’ lawsuit filed on Thursday, Mashinsky “promised to lead investors to financial freedom but led them down a path of financial ruin”.
The Crypto lender declared bankruptcy in July 2022 shortly after TerraUSD (UST) and Terra Luna (LUNA) imploded, plummeting digital asset prices and wiping out over $40 billion from the crypto market.
Mashinsky later stepped down as CEO of the company amid reports of massive withdrawals from Celsius custodial wallets by Mashinsky himself and other top-ranking executives.
Attorney General James argued that Mashinsky continued to bait investors into depositing billions in crypto assets despite the company losing millions of dollars in risky investment strategies. Per Thursday’s filing, James said Mashinsky failed to register as a securities and commodities dealer.
