Ex-Celsius CEO is sued by NY for duping crypto investors
The alleged scheme ran from 2018 to June 2022, when Celsius froze withdrawals
Former Celsius Network Ltd. Chief Executive Officer Alex Mashinsky, whose once high-flying crypto lender went bankrupt last year, was sued for fraud by the New York attorney general the latest fallout from turmoil in the industry.
Mashinsky, who co-founded Celsius, duped hundreds of thousands of investors out of billions of dollars of cryptocurrency by repeatedly making false and misleading statements about the lender’s safety, according to a suit filed Thursday in Manhattan.
The alleged scheme ran from 2018 to June 2022, when Celsius froze withdrawals.
New York’s lawsuit aims to permanently bar Mashinsky from doing any business relating to the issuance, offer or sale of securities or commodities in the state.
It also seeks to stop him from serving as director or officer of any company doing business in New York.
Mashinsky didn’t immediately respond to a message seeking comment.
It’s the latest blow to the industry’s image after the arrest last month of former cryptocurrency mogul Sam Bankman-Fried on fraud charges and the collapse of his FTX empire.
James, who has raised the alarm about crypto risks since early 2021, has engaged in several enforcement actions in the industry, including suits last year against Nexo Inc. and a nearly $1 million settlement with crypto platform BlockFi Lending LLC.