{"id":288820,"date":"2023-01-13T15:44:18","date_gmt":"2023-01-13T15:44:18","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=288820"},"modified":"2023-08-11T03:16:55","modified_gmt":"2023-08-11T02:16:55","slug":"former-celsius-ceo-sued-for-allegedly-defrauding-customers","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/former-celsius-ceo-sued-for-allegedly-defrauding-customers\/","title":{"rendered":"Former Celsius CEO sued for allegedly defrauding customers"},"content":{"rendered":"<p>New York attorney General Letitia James filed a lawsuit against Alex Mashinsky, the co-founder and former CEO of Celsius Network LLC.<\/p>\n<p>James said that Mashinsky violated the Martin Act and New York's Executive and General Business Laws by allegedly defrauding investors into depositing billions of dollars into digital asset within the cryptocurrency lending company.<\/p>\n<blockquote><p>&#8220;Between 2018 and at least June 2022, Defendant Alex Mashinsky engaged in a scheme to defraud hundreds of thousands of investors.&#8221;<\/p><\/blockquote>\n<h2>Mashinsky allegedly misled customers<\/h2>\n<p>James alleged that Mashinsky did so &#8220;by using false and misleading representations to induce&#8221; customers into depositing &#8220;billions of dollars in digital assets&#8221; with Celsius Network LLC.<\/p>\n<p>Mashinsky served as the &#8220;public face&#8221; of Celsius and promised investors high yields with minimal risk. However, when Celsius struggled to generate enough revenue to pay the promised yields on investors' deposits, it allegedly adopted significantly riskier investment strategies.<\/p>\n<h2>Finer details of the motion<\/h2>\n<p>The <a href=\"https:\/\/ag.ny.gov\/sites\/default\/files\/mashinsky_complaint.pdf\">motion<\/a> seeks to prevent Mashinsky from &#8220;engaging in any business relating to the issuance, advertisement, or sale of securities or commodities in New York,&#8221; as well as &#8220;directing Mashinsky to pay damages, restitution, and disgorgement.&#8221;<\/p>\n<p>The motion also stated that &#8220;New Yorkers had deposited a total of approximately $440 million on the Celsius platform&#8221; as of Dec. 31, 2021.<\/p>\n<p>This was was the result of Mashinsky informing investors that the Celsius earned interest account (EIA) model as &#8220;sleep to earn.&#8221;<\/p>\n<blockquote><p>&#8220;You don't have to do anything, you just go to sleep, and every Monday we pay you yield.&#8221;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York attorney General Letitia James filed a lawsuit against Alex Mashinsky, the co-founder and former CEO of Celsius Network LLC. James said that Mashinsky violated the Martin Act and New York&#8217;s Executive and General Business Laws by allegedly defrauding investors into depositing billions of dollars into digital asset within the cryptocurrency lending company. &#8220;Between [&hellip;]<\/p>\n","protected":false},"author":1398,"featured_media":342506,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39,35372,60793],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Former Celsius CEO sued for allegedly defrauding customers<\/title>\n<meta name=\"description\" content=\"The New York attorney general has filed a lawsuit against Celsius Network&#039;s former CEO Alex Mashinsky for allegedly defrauding investors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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