On January 5, 2023, the state of New York and its attorney general, Letitia James, filed a lawsuit against Alex Mashinsky, the former CEO of Celsius, alleging that he lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York.
So what you’re telling me is I can open an illegal bank, create a new token with absolutely no use case, pump my bags, lie to people that their money in my bank is theirs, once shit hits the fan file Chapter 11, and all is fine and dandy because of my terms of service? #Celsius
— Rhombicosidodecahedron.pls (@slendermusician) January 5, 2023
Letitia James wrote in Twitter:
"Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York. Mashinsky tricked hardworking people into investing their life savings into Celsius, promising big financial returns and claiming the platform was safer than a bank. Instead, Celsius collapsed and New Yorkers were left in financial ruin. I'm suing to get New Yorkers their money back and ban Mashinsky from doing business in New York."
I'm suing the former CEO of cryptocurrency platform @CelsiusNetwork for defrauding investors out of billions of dollars.
— NY AG James (@NewYorkStateAG) January 5, 2023
Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York.
James also stated that Mashinsky tricked individuals into investing their life savings into the platform, promising big financial returns and claiming that it was safer than a bank, ultimately leading to its collapse and leaving New Yorkers in financial ruin. The lawsuit aims to get money back for the approximately 26,000 affected New Yorkers and ban Mashinsky from doing business in the state.
Additionally, a recent ruling by a bankruptcy judge in New York stated that Celsius Network owns most of the cryptocurrency deposited by its customers, meaning that most of these individuals will be at the end of the line for repayment in the company's bankruptcy, which affects around 600,000 accounts holding assets worth $4.2 billion.
It’s official. #Celsius was an illegal bank. Judge Glenn has ruled that Earn is property of the estate https://t.co/QLjTD1DN5B
— Simon Dixon (@SimonDixonTwitt) January 4, 2023