By Richard Hines
New York’s attorney sues crypto lender Celsius ex CEO, Alex Mashinsky for deceiving investors about the company’s state, stating the firm was in good form and there was no sign of a liquidity crisis.
Also, for encouraging investors to keep investing their funds while the firm was on the verge of liquidation.
Charges Of Deceit And Fraud
The attorney general of New York has filed a lawsuit against the CEO of Celsius Network for deception and fraud.
According to the accusations laid against the ex CEO, Celsius Network ex CEO Alex Mashinsky misled investors about the company’s situation by claiming that everything was great and that no liquidity problems were in sight.
Additionally, he encouraged investors to continue investing into the company despite the fact that the firm was on the verge of bankruptcy.
General Letitia James, the prosecutor in charge of this case, has declared that the state will take action to forbid Mashinsky from conducting any type of business there. Additionally, he will be compelled to compensate the victims and affected investors.
Mashinsky pledged to take his investors to financial freedom in a statement that was referenced in court, but instead led them to disaster and many losing their funds after the exchange froze withdrawals.
Mashinsky is accused of providing a false report regarding the number of investors in the Celsius firm in this lawsuit as well.
Additional accusations against him point to him claiming his company was safer than a bank whereas his firm was facing liquidity crunch. Despite the situation of his firm, he still persuaded investors to invest in this dying company.
Events Before Its Bankruptcy Filing
The Celsius corporation opted to freeze asset withdrawals in June 2022 after informing the community that it was experiencing poor market conditions. This was the first move the firm made before declaring bankruptcy.
Ex-CEO Alex Mashinsky allegedly took $10 million from this firm before it ceased withdrawals and shut down operations.
The United States Bankruptcy Court for the Southern District of New York is now presiding over this matter.
Following the circulation of these filing reports, neither Mashinsky nor any member of the Celsius team responded to any of these allegations.