New York Attorney General Sues Ex-Celsius CEO Who Is Filing For Bankruptcy

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Allegation that “I deceived investors with false explanations”

The New York State Attorney General has sued Alex Mashinsky, co-founder and former CEO of crypto lending company Celsius Network.

It is in the form of defrauding cryptocurrency worth hundreds of billions of yen (billions of dollars) from hundreds of thousands of investors, including more than 26,000 New Yorkers. The main problems with Celsius are as follows.

  • Repeatedly made false and misleading statements about the safety of Celsius in order to solicit investors.
  • While the company lost hundreds of millions of dollars on risky investments, Mashinsky covered up losses by misrepresenting Celsius’ financial position.
  • Mashinsky failed to register as a Celsius sales representative and as a securities and commodities trader.

As a result, Attorney General Letitia James is seeking a ban on Mashinsky from doing business in New York, damages and indemnity, and a waiver of unjustly gained benefits.

“It is clear that deceiving investors with unsubstantiated false promises is illegal,” James said. He continued to pursue the responsibility of

It also urges New Yorkers to report the matter to the Attorney General’s Office if they are affected by fraudulent activity in the cryptocurrency market beyond this one. It also recommended anonymous accusations from crypto industry insiders who witnessed the fraudulent activity.

Who is the New York State Attorney General?

Chief Legal Officer of New York State. He serves as a guardian of the legal rights of New York’s citizens, organizations and natural resources. The Attorney General’s Office employs more than 700 attorneys and more than 1,800 other staff.

▶Cryptocurrency Glossary

background

After the collapse of the old Terra ecosystem in May 2022, Celsius stopped withdrawing customer funds in June following a chain of defaults in the cryptocurrency market. In July, Chapter Eleven filed for bankruptcy in the United States.

Since then, U.S. state officials investigating the company said Celsius “made false and misleading representations to investors about its financial health and compliance with securities laws.”

It has also been pointed out that the company has declared that it has the ability to protect customer assets even though it did not have enough assets, and that it may have manipulated the price of its own token CEL.

association: U.S. state financial authorities point out, did Celsius provide false information to investors?

Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)

A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.

▶Cryptocurrency Glossary

business sale

In October last year, the US bankruptcy court approved a plan to sell Celsius. Businesses such as yield accounts, crypto balances, retail and institutional lending portfolios, swap services, staking platforms, payment functions and decentralized finance sectors will be auctioned.

As part of this, US Galaxy Digital announced in December that it would acquire GK8, a custody company owned by Celsius.

association: Galaxy Digital acquires Celsius-affiliated companies

The post New York Attorney General Sues Ex-Celsius CEO Who Is Filing For Bankruptcy appeared first on Our Bitcoin News.

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