Celsius Network Founder Sued for Defrauding Investors
Alex Mashinsky, the founder of Celsius Network, faces allegations of defrauding the investors of substantial amounts. The charge initiated by the New York attorney general Letitia James alleges a contravention of the state’s securities laws. Letitia called Mashinsky “the modern-day Robin Hood” for presenting false financial statements and misleading investors to invest in the “unambiguous” Celsius platform.
Mashinsky Charged by the New York Attorney-General
Celsius Network, a crypto lending company initiated in 2017 by the Mashinsky, was declared bankrupt in July last year. The pursuit to recover Celsius investors’ assets has yielded no gains due to the current bearish crypto market.
Following the investors’ devastation, the New York AG accuses the now-defunct Celsius founder of defrauding the platform’s investors. A lawsuit presented at the New York AG office on January 5 accuses Mashinsky of failing to disclose to the investors the risk on investment when Celsius was making losses.
Mashinsky is also accused of providing misleading information to the customer by assuring unrealistic interest that translated to 17% on the Earn platform. Additionally, Mashinsky was charged with non -compliance with the securities law by operating as an unregistered dealer for Celsius securities and commodities.
New York Attorney-General Accusation
A press release by the AG proclaimed that the Mashinsky scheme promised to stabilize their financial health but later turned to financial ruin. Reportedly, the lawsuit confirmed that more than 26000 investors based in New York fell into the Mashinsky scheme.
The quest for justice for the desperate New York investor is anchored to the US law that considers misleading the investors as illegals. If the court ruling approves Letitia’s charges, Mashinsky will be banned from conducting any business in New York and forced to compensate the investors for lost assets.
On the contrary, if the court ruling “favor” Mashinsky, he will be subjected to court trials while under probe. In the meantime, Mashinsky Attorney Benjamin Allee dismisses the claim and is ready to face Letitia in court. Allee’s remarks on the allegation correspond to the client’s remorseful statement in September 2022.
Celsius Criticized
Letitia’s lawsuit portrays most investors lamenting the loss of their hard-earned savings stuck on the platform. Among the unhappy Celsius users was a disabled veteran who lost $36000 on the forum. Letitia noted another entrepreneur who had acquired two loans to invest in the Mashinsky scheme.
He also identified a disabled man who generated $8 per hour and whose hope was extinguished by the Celsius platform.
June 2022, Celsius’ suspension of redemption disclosed that the firm operated at a deficit rounding up to $1B and Mashinsky had made withdraws amounting to $10M prior.
Editorial credit: T. Schneider / Shutterstock.com
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