Alex Mashinski, co-founder and former CEO of Celsius, said: cash out $17 million in virtual currency prior to suspension of customer virtual currency withdrawals and prior to company virtual currency withdrawals final bankruptcyI found myself on the receiving end of the , A civil lawsuit accuses him of defrauding hundreds of thousands of investors out of billions of dollars by misrepresenting the security of a volatile platform.
The lawsuit, filed Thursday by New York Attorney General Letitia James, alleges that Mashinski was involved in a years-long scheme to defraud customers from 2018 to June 2022. Meanwhile, Mashinsky used false and misleading representations to convince investors that Celsius was a safe alternative. disregard the fact that the investor’s funds were exhausted.
Self-described as a modern-day Robinhood lending platform, Celsius has captivated cryptocurrency enthusiasts by promising an unprecedented 17% return on digital assets. Starley noted that over $20 billion in digital assets was put into the company by investors keen to realize those returns. But behind the scenes of it all, Celsius was allegedly struggling to generate enough revenue to pay its customers very high yields. It is said that he began to engage in risky investments, including investing hundreds of millions of dollars in decentralized finance. The company will lose millions of dollars from these investments. The case alleges that Mashinsky did not disclose these losses to investors and hid Celsius’s bleeding financial situation.
“Alex Mashinski promised to lead investors to financial freedom, but he led them down a path of financial ruin,” James said. statement“The law makes it clear that it is illegal to make false, unsubstantiated promises or mislead investors. On behalf of the thousands of New Yorkers who were duped by Mr. Mashinsky today. , is taking action to recoup its losses.”
The lawsuit alleges that Mashinsky personally made false or misleading statements about Celsius’ overall safety, user population, and investment strategy. Mashinsky tried to convince users, without evidence, that his cryptocurrency lending platform was safer than highly regulated baking institutions. In reality, “neither Celsius nor his clients hoped to receive the same protection as the banks,” says James. James’ lawsuit seeks to permanently bar Mashinsky from engaging in the sale or offering of securities or commodities and to prevent him from serving as a director or officer of any company doing business in New York. Mashinski could also be forced to pay damages for violating the Martin Act, a law used to combat securities and commodity fraud in New York State.
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Celsius suddenly prevention Investors from withdrawing funds amid a turbulent crypto-collapse finds value Its Celsius crypto token value becomes practically worthless.The company assured customers the suspension was temporary, but Celsius continued declare Just one month after the Chapter 11 bankruptcy.To make matters worse, Mashinski and former Chief Strategy Officer Daniel Leon allegedly In the months leading up to the company’s eventual demise, it withdrew a total of $17 million in cryptocurrency assets.
New York isn’t the only state interested in the Celsius meltdown. In all, at least 40 separate states have everything. launch Independent investigation into the platform regarding fraud allegations.
