Former Celsius CEO sued for allegedly defrauding customers

New York State Attorney General Letitia James has filed a lawsuit against Celsius Network LLC co-founder and former CEO Alex Mashinsky.

James said Mashinsky violated the Martin Act and New York’s administrative and general business laws by allegedly tricking investors into depositing billions of dollars into digital assets within a crypto lending firm. .

From 2018 through at least June 2022, defendant Alex Mashinski was involved in a scheme to defraud hundreds of thousands of investors.

Suspicion that Mashinski misled customers

James alleged that Mashinsky “used false and misleading language” to induce customers to deposit “billions of dollars in digital assets” with Celsius Network LLC.

Mashinski served as the “public face” of Celsius, promising investors high yields with minimal risk. But when Celsius struggled to generate enough returns to pay the promised yields on his investors’ deposits, he allegedly adopted a rather risky investment strategy.

motion details

of motion In an attempt to prevent Masinski from “engaging in business related to the issuance, advertising, or sale of securities or commodities in New York” and from “instructing Mainski to pay damages, restitution, and exploitation.” is.

The motion also states that as of December 31, 2021, “New Yorkers have deposited a total of approximately $440 million into the Celsius platform.”

This was the result of Mashinski letting investors know that Celsius’ interest account (EIA) model was “sleep to earn”.

“You don’t have to do anything. Just sleep and pay your yield every Monday.”