<p class="MsoNormal">Letitia James, the Attorney General of the State of New York, has charged Alex Mashinsky, the Co-Founder of a bankrupt crypto lender Celsius Network, with fraud.</p><p class="MsoNormal">In a lawsuit <a href="https://ag.ny.gov/sites/default/files/mashinsky_complaint.pdf" target="_blank" rel="follow">filed</a> before a supreme
court in the County of New York on Thursday, James accused the former CEO of “defrauding hundreds of thousands of investors, including more than 26,000 New
Yorkers, out of billions of dollars worth of cryptocurrency.”</p><p class="MsoNormal">“Mashinsky repeatedly claimed that
Celsius made safe, low-risk investments and only lent assets to credible and
reputable entities. However, investors’ assets were routinely exposed to
high-risk counterparties and strategies, many of which resulted in losses that
Mashinsky concealed from investors,” James said in <a href="https://ag.ny.gov/press-release/2023/attorney-general-james-sues-former-ceo-celsius-cryptocurrency-platform-defrauding" target="_blank" rel="follow">a statement</a>.</p><p>Watch the recent FMLS22 session on cryptocurrency with participation from Dr Lisa Cameron, a Member of Parliament in the UK House of Commons.</p><p class="MsoNormal text-align-justify">New York Accuses Celsius of Leaving
Investors in ‘Financial Ruin’</p><p class="MsoNormal">Additionally, the New York Attorney General accused Mashinsky of mispresenting and hiding Celsius’ worsening financial conditions from
its investors even as it was losing “hundreds of millions of dollars of assets
in risky investments.” She added that Mashinksy had left many investors in "financial ruin” as a result. </p><p class="MsoNormal">In her filing before the court, the
Chief Law Officer asked the court to permanently bar Mashinsky from dealing in
any business relating to the issuance, offer or sale of securities or
commodities in New York. Moreover, James wants the court to stop the ex-Celsius CEO from serving as
a Director or officer or any New York-based firm. </p><p class="MsoNormal">In addition, the Attorney General asked the court to order Mashinksy to give up profits obtained from the failed crypto
lender business as well as return investor funds with additional payment for damages.</p><p class="MsoNormal text-align-justify">The Collapse of Celsius Network</p><p class="MsoNormal">In July last year, Celsius Network <a href="https://www.financemagnates.com/cryptocurrency/news/crypto-lender-celsius-files-for-bankruptcy-in-new-york/" target="_blank" rel="follow">filed
for Chapter 11 bankruptcy</a> before a New York court over a month after it <a href="https://www.financemagnates.com/cryptocurrency/news/celsius-suspends-crypto-withdrawals-due-to-market-volatility/" target="_blank" rel="follow">paused
withdrawals</a> on its
platform, citing volatile markets. </p><p class="MsoNormal">The crypto lender’s failure came in the
aftermath of <a href="https://www.financemagnates.com/cryptocurrency/terra-luna-how-these-7-wallets-brought-the-ecosystem-to-its-knees/" target="_blank" rel="follow">the
Terra-LUNA collapse</a> which saw the demise of <a href="https://www.financemagnates.com/cryptocurrency/binanceus-wants-to-acquire-bankrupt-crypto-lending-platform-voyager/" target="_blank" rel="follow">Voyager Digital</a> and <a href="https://www.financemagnates.com/cryptocurrency/news/three-arrows-capital-gets-liquidation-order-from-bvi-court/" target="_blank" rel="follow">Three Arrow Capital</a>. The collapse of
Celsius Network was followed by <a href="https://www.financemagnates.com/cryptocurrency/news/celsius-network-reportedly-faces-us-federal-investigation/" target="_blank" rel="follow">a
barrage of investigations</a> from US federal and state regulators.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
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