• The New York Attorney General Letitia James has filed a lawsuit against Alex Mashinsky, the former CEO of Celsius Network LLC, for allegedly defrauding investors.
• Mashinsky allegedly misled customers by making false and misleading representations to induce them into depositing billions of dollars in digital assets with Celsius Network LLC.
• The motion seeks to prevent Mashinsky from engaging in any business relating to the issuance, advertisement, or sale of securities or commodities in New York, and also seeks damages, restitution, and disgorgement.
The New York Attorney General Letitia James has taken legal action against Alex Mashinsky, the former CEO of Celsius Network LLC, alleging he defrauded investors. The motion seeks to prevent Mashinsky from engaging in any business relating to the issuance, advertisement, or sale of securities or commodities in New York, while also seeking damages, restitution, and disgorgement.
According to the motion, Mashinsky served as the “public face” of Celsius Network LLC, and misled customers by using false and misleading representations to induce them into depositing billions of dollars in digital assets with the company. When Celsius Network LLC saw declining revenues, Mashinsky adopted riskier investment strategies in order to pay the promised yields on investors’ deposits.
In response to the allegations, New York Attorney General Letitia James outlined that “New Yorkers deserve to be able to trust the investments they make, and we will do everything in our power to ensure that individuals who attempt to defraud innocent investors are held accountable.”
The motion seeks to prevent Mashinsky from “engaging in any business relating to the issuance, advertisement, or sale of securities or commodities in New York,” as well as “directing Mashinsky to pay damages, restitution, and disgorgement”. The motion also stated that “New Yorkers deserve to be able to trust the investments they make, and we will do everything in our power to ensure that individuals who attempt to defraud innocent investors are held accountable.”
The motion further outlines that Mashinsky’s alleged fraudulent activities violated the Martin Act and New York’s Executive and General Business Laws. It also noted that Mashinsky “engaged in a scheme to defraud hundreds of thousands of investors” between 2018 and June 2022.
The lawsuit marks yet another example of the New York Attorney General’s office clamping down on individuals who attempt to defraud investors. The office has shown a willingness to take legal action against individuals who commit fraud or other illegal activities in order to protect the interests of investors.
It remains to be seen how the case against Mashinsky will be resolved, but it is clear that the New York Attorney General’s office is determined to ensure that investors are protected from fraudulent activities.