NY Attorney General Files Fraud Complaint Against Ex-Celsius CEO

Former Celsius Network founder Alex Mashinsky wants the New York State case against him dismissed.

Mashinsky argues in a recent recent York Supreme Court filing that the complaint should be thrown out due to misinformation and other concerns.

Says the motion to dismiss

“The Complaint, which parrots misinformation online about Mashinsky and Celsius Network, LLC (“Celsius”) and borrows others’ baseless conclusions, demonstrates a fundamental misunderstanding of Celsius’s business, and Mashinsky’s role therein.”

After Celsius went bankrupt, NYAG Letitia James sued Mashinsky in January. She claims Mashinsky misled investors about essential company data and failed to register as required by state law.

James stated,

“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.”

The motion to dismiss argues that forces outside Mashinsky’s control brought Celsius down.

“Ultimately, however, circumstances outside of Mashinsky’s (and Celsius’s) control led to a liquidity squeeze that resulted in Celsius pausing withdrawals and filing for bankruptcy. Instead of acknowledging that Celsius’s eventual downfall was caused by a series of calamitous, external events, the NYAG (Attorney General of the State of New York) pins all resulting losses on the alleged misstatements on Mashinsky alone.”

The court petition argues the complaint cynically cherry picks fragments of statements and sound bites, without broader context, falsely depicting Celsius’s exceptional transparencies with its users as a deceptive tactic.

Celsius guaranteed big returns on crypto deposits.

In January, James added,

“Mashinsky repeatedly claimed that Celsius made safe, low-risk investments and only lent assets to credible and reputable entities. However, investors’ assets were routinely exposed to high-risk counterparties and strategies, many of which resulted in losses that Mashinsky concealed from investors.”

Celsius declared into bankruptcy in July 2022 after its native asset plummeted 99% and customer withdrawals were halted.