New York Attorney General Letitia James has announced a lawsuit against disgraced former Celsius CEO Alex Mashinsky. The lawsuit outlines widespread fraud that Mashinsky and his team perpetuated on millions of investors.
James spoke about the ex-CEO:
"As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom, but led them down a path of financial ruin."
This news comes after a US bankruptcy judge ruled yesterday that the money deposited in "Earn" accounts by investors was now the property of Celsius. This win for Celsius wasn't surprising, since Mashinsky's management team cleverly put this clause in the terms of service, which was the basis of the judge's decision.
In other words, the entire Celsius platform was highly calculated fraud.
Mashinsky has taken almost no accountability for his actions after siphoning billions of dollars in cryptocurrency from mostly retail investors. Many people in the crypto space are starting to notice the similarities with the FTX collapse.
The New York suit describes Mashinsky's efforts to consistently paint Celsius's financial health as solid, despite there being obvious problems. In reality, Celsius didn't have nearly enough funds to pay back every investor who deposited on their platform.
Whether Letitia James can prove these charges in a court of law remains to be seen.