Alex Mashinsky, a co-founder of Celsius, is being sued by the NY AG for cryptocurrency fraud

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Alex Mashinsky, the co-founder and former CEO of Celsius, was sued on January 5, 2023 by the state of New York and its attorney general, Letitia James.

According to the lawsuit, Mashinsky and Celsius cheated “hundreds of thousands of investors, including more than 26,000 New Yorkers,” out of bitcoin valued at billions of dollars.

Celsius’s former CEO is accused of making false promises and deceiving investors.

The New York Attorney General filed a complaint against Alex Mashinsky, the former CEO of Celsius, the day after Core Scientific revealed that it was shutting down 37,000 bitcoin miners owned by Celsius.

Mashinsky allegedly “repeatedly made false and deceptive assertions regarding Celsius’s safety” and urged investors to “deposit billions of dollars in digital assets into the platform,” according to the lawsuit. The lawsuit claims that the Celsius failure has an impact on 26,000 New Yorkers, and James wants to prohibit Mashinsky from conducting business in the city.

Letitia James, the attorney general of New York, and the state have been taking action against cryptocurrency businesses for some time.

In a lawsuit announced at the end of September, the New York attorney general also pursued the cryptocurrency lender Nexo.

Attorney General James stated that former CEO of Celsius Alex Mashinsky “promised to take investors to financial freedom but led them down a path of financial destruction.”

Following this week’s bankruptcy judgement that determined the deposits in high-interest earning accounts belong to Celsius, a lawsuit was filed in New York against Mashinsky and his transactions with Celsius.

Judge Martin Glenn of a bankruptcy court in New York declared that Celsius, not the users who deposited the digital assets on the long-gone loan platform, is the owner of the rights to the money.

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