Business

Mashinsky, founder of Celsius Network, sued by New York for crypto fraud

Mashinsky, founder of Celsius Network, sued by New York for crypto fraud

#Mashinsky #founder #Celsius #Network #sued #York #crypto #fraud Welcome to Alaska Green Light Blog, here is the new story we have for you today:

Click Me To View Restricted Videos

Celsius Network founder Alex Mashinsky is being sued by the New York Attorney General for allegedly defrauding investors out of billions of dollars in digital currency by concealing the deteriorating state of his now-defunct cryptocurrency lending platform.

Mashinsky is accused of violating multiple laws, including New York’s Martin Act, which gives James sweeping powers to investigate securities fraud proceedings, and is being ordered to pay fines and be banned from doing business in New York.

Letitia James, the attorney general, filed a complaint alleging that Mashinsky continued to promote Celsius as a safe alternative to banks while concealing hundreds of millions of dollars in losses on risky investments and interest rates of up to 17% on deposits have offered.

James explained in a statement that Alex Mashinsky “promised to bring investors to financial independence but led them down a path of financial destruction.” Making false and unsubstantiated claims and deceiving investors is against the law.

James filed the lawsuit in a Manhattan state court. A defendant is not Celsius.

In an email Friday, Mashinsky’s attorney, Benjamin Allee, stated: “These allegations are refuted by Alex Mashinsky. He expects to defend himself vigorously in court.”

Crypto lenders rose to prominence during the COVID-19 outbreak by promising depositors quick access to credit and high interest rates. To capitalize on the discrepancy, they then lent tokens to institutional investors.

But in 2022, after a sell-off in the cryptocurrency markets that included the demise of the terraUSD and Luna tokens, the business model often proved unsustainable.

The government’s latest attempt to combat dangerous crypto operations is the case against Mashinsky. It comes after Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, was indicted in federal court last month on extensive fraud charges. He has filed a not-guilty plea.

According to Yesha Yadav, associate dean at Vanderbilt Law School in Nashville, Tennessee, James’ case “increases the fear factor that likely faces the sector where money is extremely tight and the ability to absorb significant fines can be much more limited.” James is allowed to play an “aggressive” enforcement role as there is no clear federal framework to oversee cryptocurrency, Yadav continued.

On July 13 last year, Celsius filed for bankruptcy, citing a $1.19 billion imbalance on its balance sheet. A month earlier, the Hoboken, New Jersey-based company’s 1.7 million customer withdrawals and transfers were frozen due to “extreme” market conditions.

According to a court document, Celsius had $9 billion in liabilities at the end of November, including more than $4.3 billion in consumer debt. James said Mashinsky defrauded more than 26,000 New Yorkers between 2018 and June 2022, when deposits were blocked.

Many of the victims were regular investors, she added, including a crippled veteran who lost the $36,000 he had invested for almost a decade and a father of three who lost his $375,000 in life savings. Mashinsky, who was born in Ukraine and later immigrated to Israel with his family, founded a number of companies before founding Celsius in 2017 and taking on the role of CEO and public face.

Summary of the news:

Mashinsky, Founder of Celsius Network, Sued by New York for Crypto Fraud See all the news and articles from the latest business news updates.

Click Here To Continue Reading From Source

Related Articles

Back to top button