On January 5, 2023, The State of New York Attorney General Letitia James Issued a lawsuit against Alex Mashinsky, former CEO and co-founder of Celsius. The action seeks to demand compensation for damages suffered. Mashinsky allegedly caused “hundreds of thousands of investors, including more than 26,000 New Yorkers, to lose billions of dollars in cryptocurrency.”

Previous Chief executive of Celsius accused of providing false information and making false claims

The day after Core Scientific announced that the company was closing 37,000 Celsius accounts, the New York Attorney General filed a lawsuit against Alex Mashinsky, former CEO of Celsius. The lawsuit accuses Mashinsky of “repeatedly making false and misleading statements about the safety of Celsius” and encouraging investors to put “billions of dollars in digital assets on the platform.” According to the lawsuit, 26,000 New Yorkers have been affected by the demise of Celsius and James is seeking to bar Mashinsky from doing business in New York.

The lawsuit states:

Mashinsky advertised Celsius as a safe alternative to banks, concealing that it was involved in risky investment strategies.

New York State Attorney General Letitia James has been cracking down on cryptocurrency-related businesses for some time. In June, James warned of the volatility of the crypto industry and in late November 2022, James also called on Congress to ban crypto assets from US retirement funds. Additionally, the New York attorney general targeted crypto lender Nexo in a late-announced lawsuit in September 2022.

“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom, but instead he led them to financial ruin,” said Attorney General James. “It is against the law to make unsubstantiated claims or mislead investors. Today, we are taking action on behalf of thousands of New Yorkers who were deceived by Mr. Mashinsky in order to recover their losses. My office will remain vigilant to ensure that no bad actors try to exploit New York investors.”

The lawsuit in New York against Mashinsky for his dealings with Celsius follows this week’s bankruptcy decision, which gave the owners of the now-defunct platform the rights to the funds in high-interest account deposits.

What do you think of the New York Attorney General’s suit against the former CEO of Celsius Alex Mashinsky? Let us know your thoughts on this topic in the comments below.

jamie redman

Jamie Redman is the news lead at Bitcoin.com News, a fintech journalist based in Florida. Redman has been actively involved in the cryptocurrency community since 2011, passionate about Bitcoin and open-source, decentralized, and open-source applications. Redman has written more than 6,000 articles since September 2015. Bitcoin.com News aims to educate about disruptive protocols emerging today.