The New York State Attorney General Letitia James has filed a lawsuit against the co-founder and former CEO of Celsius Network, Alex Mashinsky, accusing him of defrauding investors, including 26,000 New Yorkers.
The lawsuit alleges that Mashinsky and other individuals associated with the company misled investors in Celsius’ public offering of securities by misrepresenting the company’s financial situation and by engaging in deceptive marketing practices.
“As Celsius lost hundreds of millions of dollars of assets in risky investments, Mashinsky misrepresented and concealed Celsius’s deteriorating financial condition. Mashinsky also failed to register as a salesperson for Celsius and as a securities and commodities dealer,” a statement by Attorney General Letitia James said.
He allegedly misrepresented the company’s financial health and misled investors into believing that Celsius was a profitable and successful enterprise. Mashinsky also allegedly made misleading statements about Celsius’s expected return on investments and failed to disclose material information about the company’s financials.
The suit alleges that he also made false statements about Celsius’s customer acquisition strategy and its ability to grow its customer base and revenue.
“Mashinsky allegedly misled investors to line his own pockets with their hard-earned money and this lawsuit holds him accountable for his actions,” said Attorney General James. “We will not tolerate anyone who takes advantage of New Yorkers in an effort to get rich quick.”
The allegations against Mashinsky have sent shockwaves through the cryptocurrency industry, where he was seen as a leading figure. Many in the industry have expressed disappointment and surprise at the news.
Mashinsky has denied any wrongdoing and has defended himself against the allegations. He has stated that he is confident the truth will come out and that he will be vindicated.
The case is ongoing and the outcome is yet to be determined.