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The official board of Celsius creditors has accused Celsius co-founder Alex Mashinski and other executives of fraud, recklessness, gross mismanagement, and selfishness that ultimately led to the bankruptcy of the crypto lender. I am proposing to sue him for “disrespectful conduct.”
was suggested Complaint Lawyers representing the official committee of unsecured creditors filed in New York bankruptcy court on Feb. 14. The move follows a six-month investigation into current and former directors, officers, and employees of Celsius. said that it follows the
The Committee is composed of seven Celsius account holders and was appointed by the United States Trustees in July 2022. The Committee represents the interests of Celsius account holders and unsecured creditors.
1-In connection with the investigation, UCC has identified material claims and causes of action that Celsius has against Alex Masinsky and other insiders for breach of fiduciary duty, fraudulent transfers, and other causes of action. bottom.
Official Celsius Committee of Unsecured Creditors (@CelsiusUcc) February 14, 2023
Attorneys for White & Case LLC said, “The commission investigation uncovered material claims and causes of action based on fraud, recklessness, gross mismanagement and selfish conduct by former directors and officers of debtors. I was.
The proposed lawsuit – seeking damages in amounts to be proven in court – is intended to bring claims and causes of action against the following Celsius officers, individuals and affiliated entities:
“Mr. Mashinsky, Mr. Leon, Mr. Goldstein, Mr. Baudry, Mr. Urata Thompson and Mr. Troitler have breached their fiduciary duty to Celsius,” the attorney wrote, adding:
“These parties were aware that Celsius had promised to pay their customers interest that they could not pay, and did nothing to resolve the matter.”
The lawyers also said that management made “negligent and reckless (and sometimes selfish) investments” that caused Celsius to lose $1 billion in a year, with mismanagement costing it another $200 million. I claim. You have not adequately described the company’s assets and liabilities.
“After that loss, they didn’t invest in the company’s systems or develop systems to properly fix the problem, which resulted in further losses,” they argued.
The motion also alleges that executives directed Celsius to spend “hundreds of millions of dollars” on the open market to raise the price of CEL tokens, but they allegedly secretly sold tens of millions of CEL tokens. sold (or was aware of such a sale). own profit.
They stood idly by as Mr. Mashinsky recklessly bet hundreds of millions of dollars on cryptocurrency market movements. Did.”
Related: Judge denies Celsius user’s motion for return of assets
“Ultimately, when it became clear that Celsius had to file for bankruptcy, the potential defendants withdrew their assets from the sunken ship. […] We actively encourage our clients to keep their assets on the Celsius platform,” the lawyer added.
The Celsius Creditors Board said the proposed complaint was only “the first of many steps” in an investigation into the misconduct of potential former Celsius executives and the return of assets to victims.
5- As always, UCC’s goal is to maximize recovery for the benefit of Celsius’ customers and unsecured creditors who have been victims of Mr. Mashinsky’s or others’ negligence, recklessness or fraud. is.
Official Celsius Committee of Unsecured Creditors (@CelsiusUcc) February 14, 2023
A public hearing on the proposed complaint will be held on March 8, 2023.
Cointelegraph did not immediately respond to a request for comment from Celsius.
