• The New York Attorney General has sued the former Celsius Network CEO, Alex Mashinsky, for defrauding investors out of billions of dollars.
• The company filed for Chapter 11 bankruptcy in July 2022 in the US Bankruptcy Court for the Southern District of New York.
• In June, Celsius halted customer withdrawals citing “extreme market conditions” and the CEO resigned in September after reportedly withdrawing $10 million from the company weeks before the stoppage.
The state of New York’s Attorney General Letitia James recently revealed on Twitter that she is suing the former Celsius Network head, Alex Mashinsky, for defrauding investors out of billions of dollars. This news comes as a surprise to many in the crypto industry, as Mashinsky was once a highly respected figure within the community. His alleged deception has now led to many questioning just how much trust they can put in the industry.
The company filed for Chapter 11 bankruptcy in July 2022 in the US Bankruptcy Court for the Southern District of New York, hoping that the process would help the company to stabilize and develop a restructuring plan. In an effort to boost confidence in the company, the CEO boasted of a solid and experienced team to help in the restructuring process.
Unfortunately, the situation quickly began to deteriorate. In June, Celsius halted customer withdrawals citing “extreme market conditions”, causing a great deal of concern amongst customers. This was followed by the CEO resigning in September, shortly after he reportedly withdrew $10 million from Celsius weeks before the company stopped withdrawals.
This prompted the New York Attorney General to take legal action against Mashinsky, accusing him of defrauding investors. This case could have a major impact on the crypto industry as a whole, as it could lead to tighter regulations and stricter oversight of crypto businesses.
It remains to be seen what the final outcome of this case will be and what impact it will have on the industry. However, one thing is certain – this case will be closely watched by all involved, as it could shape the future of the crypto world.