Former CEO of Celsius Accused of Making False Crypto Fraud

The New York Attorney General filed a complaint against Alex Mashinsky, the former CEO of Celsius, the day after Core Scientific revealed that it was shutting down 37,000 bitcoin miners owned by Celsius. Mashinsky allegedly “repeatedly made false and deceptive assertions regarding Celsius’s safety” and urged investors to “deposit billions of dollars in digital assets into the platform,” according to the lawsuit.

The lawsuit claims that the Celsius failure has an impact on 26,000 New Yorkers, and James wants to prohibit Mashinsky from conducting business in the city. The complaint claims that Mashinsky misrepresented Celsius’s involvement in dangerous investment practices while promoting it as a safe alternative to banks.

Letitia James, the attorney general of New York, and the state have been taking action against cryptocurrency businesses for some time. James issued a volatility alert for the cryptocurrency market in June. James also requested Congress to prevent crypto assets from being included in U.S. retirement funds at the end of November 2022. In a lawsuit that was revealed at the end of September 2022, the New York attorney general also attacked the cryptocurrency lender Nexo.

Following this week’s bankruptcy judgement that determined the deposits in high-interest earning accounts belong to Celsius, a lawsuit was filed in New York against Mashinsky and his transactions with Celsius. Judge Martin Glenn of a bankruptcy court in New York ruled that Celsius, not the clients who made the deposits of the digital assets, is the owner of the rights to the money.

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