Suit alleges that the executive defrauded hundreds of thousands of investors.
January 5, 2023, 12:41 PM
The former chief executive of the cryptocurrency lending platform Celsius Network defrauded hundreds of thousands of investors out of hundreds of millions of dollars' worth of cryptocurrency, New York Attorney General Letitia James alleged in a new lawsuit filed Thursday.
Alex Mashinsky lied to investors, concealed Celsius' dire financial condition and failed to register as required by state law, the lawsuit said.
As Celsius lost some $440 million in risky investments, Mashinsky concealed the platform's rapidly deteriorating financial condition, according to the lawsuit, which seeks to ban him from doing business in New York and requires him to pay damages, restitution and disgorgement.
"As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin," James said in a statement accompanying an announcement of the lawsuit.
Celsius is a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for receiving yield on their deposited assets. Throughout Mashinsky's tenure as CEO he made numerous false and deceptive statements about Celsius' safety, number of users, and investment strategies to recruit investors, the lawsuit said.
Alex Mashinsky appears on stage of the Web Summit 2021 at the Altice Arena in Lisbon, Portugal, Nov. 4, 2021.
Piaras à Mãdheach/Sportsfile via Getty Images, FILE
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