Ex-Celsius Network CEO Sued for Defrauding Investors of Billions

• New York’s state attorney general Letitia James has sued Alex Mashinsky, the former CEO of Celsius Network, for defrauding investors out of billions of dollars.
• Celsius Network filed for Chapter 11 bankruptcy in July 2022, and Mashinsky withdrew $10 million from Celsius weeks before the company stopped customer withdrawals.
• The Attorney General’s office is seeking to recover money for investors, as well as penalties and other forms of relief.

The New York State Attorney General Letitia James recently revealed that she has filed a lawsuit against Alex Mashinsky, the former CEO of Celsius Network, for defrauding investors out of billions of dollars. The lawsuit was filed in the US Bankruptcy Court for the Southern District of New York.

Celsius Network filed for Chapter 11 bankruptcy in July 2022 and at the time of filing, the CEO had boasted of a solid and experienced team to help through the restructuring process. Before filing for bankruptcy, Celsius halted customer withdrawals in June of the same year, citing “extreme market conditions.” The CEO resigned in September, shortly after it was reported that he had withdrawn $10 million from Celsius weeks before the company stopped customer withdrawals.

The Attorney General’s office is now seeking to recover money for investors, as well as penalties and other forms of relief. The lawsuit claims that Mashinsky and Celsius Network violated New York’s Martin Act and Executive Law by, among other things, misappropriating and misusing investor funds, issuing false and misleading statements to investors, and failing to disclose material information.

The Attorney General is also seeking to have Mashinsky and Celsius Network disgorge all profits and other ill-gotten gains from the alleged violations, as well as the imposition of civil penalties. In addition, the Attorney General is seeking to enjoin Mashinsky and Celsius Network from engaging in any further violations of the Martin Act and Executive Law.

This latest lawsuit is yet another example of the Attorney General’s commitment to protecting the rights of investors and ensuring that those who violate the law are held accountable. The Attorney General’s office will continue to investigate and prosecute those who seek to defraud investors and undermine the integrity of the financial markets.