Celsius Network founder Alex Mashinsky is defending himself against allegations of defrauding investors out of billions of dollars in cryptocurrency through his bankrupt lending platform. The New York State Attorney General filed a complaint in January accusing Mashinsky of promoting Celsius as a safe alternative to banks while charging users high interest rates on deposits. The civil lawsuit seeks to ban Mashinsky from doing business in New York and to force him to compensate for violating state laws such as the Martin Act.
Mashinsky’s Response
Mashinsky’s defense motion argues that the NYAG’s complaint “parrots misinformation” and bases its conclusions on others’ unfounded claims. He also suggests that the lawsuit demonstrates a lack of understanding of the lender’s business and his role in it. Mashinsky claims that Celsius’ losses were the result of a liquidity crisis and circumstances beyond his control, rather than misstatements on his part. In addition, Mashinsky’s response denies claims that Celsius offered securities or commodities services and alleges that the NYAG cherry-picked statements without proper context.
Messy Record-Keeping
In the midst of an auction for Celsius’ business, Coinbase and Gemini have joined in the bidding. Celsius has been criticized for poor record-keeping and inadequacies in its internal systems. In an effort to rectify this, Celsius has sought to merge its UK and US entities in order to organize its bookkeeping.
