• New York State Attorney General Letitia James has filed a lawsuit against ex-Celsius Network CEO Alex Mashinsky, accusing him of defrauding investors through false statements about the company’s health.
• The lawsuit alleges that Mashinsky misled investors between 2018 and at least June 2022 to keep the money flowing into the lending platform.
• The Attorney General is seeking to ban Mashinsky from ever serving as a director or officer of a New York-registered business, and to recover all losses from the fraudulent activity.
The New York Attorney General Letitia James has taken legal action against the former CEO of Celsius Network, Alex Mashinsky, for allegedly defrauding investors through false statements regarding the company’s health. According to the lawsuit, Mashinsky misled investors between 2018 and at least June 2022 in order to keep the money flowing into the lending platform.
The Attorney General is seeking to ban Mashinsky from ever serving as a director or officer of a New York-registered business, and to recover all losses from the fraudulent activity. In addition, the New York State Office of the Attorney General is seeking to bar Celsius Network from engaging in any further business activities in the state.
The complaint alleges that Mashinsky and Celsius Network engaged in a “fraudulent scheme” to deceive investors into believing the company was healthy and growing, when in reality it was in a state of financial distress. The complaint claims that Mashinsky misled investors on the company’s financial standing, its growth rate, and its ability to pay out its obligations.
In addition, the complaint alleges that Mashinsky and Celsius Network used misleading advertising and promotional materials to entice investors to pour money into the platform. According to the complaint, Mashinsky and Celsius Network falsely claimed to be the largest lender in the cryptocurrency space and that the company had an “A+” credit rating from a major rating agency.
The complaint also alleges that Mashinsky and Celsius Network failed to disclose the true financial condition of the company, which the complaint alleges was far worse than what the company was representing to investors. This included concealing the “true level of risk” posed by the company’s loan portfolio, which was significantly higher than the company was representing.
The complaint also alleges that Mashinsky and Celsius Network were aware of the risks posed by their loan portfolio, but failed to disclose these risks to investors. As a result, investors were unaware of the risks posed by the company’s loan portfolio and were unaware of the true financial condition of the company.
The Attorney General’s office is seeking to hold Mashinsky and Celsius Network accountable for their alleged fraudulent conduct. The office is seeking monetary damages, as well as an injunction to prevent the company from engaging in any further business activities in the state.
The case serves as a reminder of the importance of transparency and disclosure when dealing with investments. Investors should always be aware of the potential risks posed by any investment, and should take the time to research and understand the investments they make. It is also important to remember that investments can be risky, and that investors should never be misled or deceived when considering an investment.