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Former Celsius CEO Alex Mashinsky Fights Back Against New York Attorney General’s Accusations

1 min
Updated by Geraint Price
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In Brief

  • Alex Mashinsky claims that the NYAG made baseless allegations against him.
  • He has filed a motion to dismiss the complaint.
  • In January, Mashinsky was sued for allegedly defrauding 26,000 New Yorkers.
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Alex Mashinsky, the former CEO of Celsius, has filed a motion to dismiss New York Attorney General’s complaint claiming the complaint made baseless conclusions.

After Celsius’s collapse, the company and its executives became submerged in various legal battles with regulators, creditors, and investors.

Mashinsky Fights Back Against Allegations

On Tuesday, Alex Mashinsky’s attorneys filed a motion to dismiss New York Attorney General (NYAG) Letitia James’ complaint.

In January, NYAG sued Mashinsky for defrauding billions in cryptocurrency from over 26,390 New Yorkers. However, Mashinsky’s filing claims that apart from a single New York resident who mortgaged to invest in Celsius, NYAG’s complaint does not identify other New York Celsius users. 

NYAG also alleged that Mashinksky failed to register as a salesperson for the crypto lending platform and as a securities and commodities dealer.

But, Mashinsky’s legal team counters, “When a user desired to open an Earn Account, Celsius was the counterparty, not Mashinsky. As such, he was not a dealer.”

Safer Than a Bank?

Moreover, James accused Mashinsky of repeatedly asserting that Celsius was safer than a bank. But the former Celsius CEO’s court filing argues:

“The alleged statements in which Mashinsky compared the safety of Celsius to that of a bank or securities broker-dealer are immaterial because they are opinion or mere puffery. These statements did not guarantee a specific outcome but instead are opinions that cannot be proved”

The crypto lending platform filed for Chapter 11 bankruptcy in July 2022, mainly due to the contagion effect of the collapse of the Terra Luna ecosystem.

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Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since...