In a recent development surrounding the high-profile Federal Trade Commission (FTC) case against the crypto platform Celsius, former CEO Alex Mashinsky requested that a New York district court dismiss the charges against him.
The core of his argument rests on the timeline of his resignation from the firm and the subsequent charges by the FTC.
Why Mashinsky Seeks Dismissal
In a recent court filing, Mashinsky’s legal team argued that the FTC’s case against their client should be dismissed. The legal defense bases its argument on the assertion that the regulatory body cannot “substantiate a claim that Mashinsky ‘is violating’ or is ‘about to violate’ the law.”
This is primarily because he relinquished his position as the CEO of Celsius on September 27, 2023. Such nuances in legal proceedings, especially in high-stakes cases, often become crucial nuances that define these legal cases.
It is worth noting that Mashinsky isn’t the only former executive from Celsius under the FTC’s scrutiny. Co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein have also been implicated in the lawsuit.
This information was revealed in a court filing disclosed on Monday. According to the filing, much like Mashinsky, Goldstein is challenging the FTC charges, seeking their dismissal.
FTC’s Charges And Celsius’s Settlement
The heart of the FTC’s lawsuit against Celsius centers on the allegations that the firm, including its top executives, such as Mashinsky, had engaged in alleged “deceptive practices.”
The commission alleges that consumers were lured into transferring their cryptocurrencies onto the Celsius platform. According to the commission, the platform’s leadership allegedly made false guarantees, assuring users that their crypto deposits would remain untouched and secure.
If proven true, such allegations would signify a severe breach of trust between the platform and its user base. As many in the crypto realm would acknowledge, trust is the cornerstone of any financial transaction.
However, Celsius has already arrived at a settlement agreement with the FTC in what appears to seek some closure. Inked in July, the deal saw the crypto platform consent to a payment of $4.7 billion.
Given Celsius’s ongoing bankruptcy proceedings, the FTC, in an unexpected decision, decided to hold off on enforcing the payment. This was done to ensure that Celsius could maximize the return of its remaining assets to its clientele, many of whom are eagerly waiting for resolution.
Featured image from Unsplash, Chart from TradingView
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