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New York Attorney General Letitia James filed a lawsuit against the founder in January, possibly using the Martin Act, a robust state securities statute, to pursue specific claims.

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New York Attorney General Letitia James can move forward with her civil fraud lawsuit against Alex Mashinsky, the founder and former CEO of the now-defunct crypto lender Celsius Network, according to a judge’s decision in Manhattan state court on Friday.

The lawsuit was filed by James in January before Mashinsky faced federal charges. Justice Margaret Chan ruled that the allegations were sufficient, suggesting that Mashinsky committed fraud by misrepresenting Celsius as a safe banking option while concealing its risks, resulting in losses of hundreds of millions of dollars.

Under Investigation by Multiple Authorities

According to Justice Chan, the “earned interest accounts” offered by Celsius to its clients were considered securities under state law. As a result, New York Attorney General Letitia James may pursue specific claims using the Martin Act, a robust state securities statute.

The judge’s 25-page decision stated that the attorney general’s lawsuit indicates a reasonable inference that the harm experienced by investors resulted, at least in part, from Mashinsky’s alleged misrepresentations made in New York about Celsius‘ financial well-being and investment safety.

Mashinsky has denied any wrongdoing related to criminal fraud charges brought against him by the United States Department of Justice. Additionally, the United States Federal Trade Commission (FTC), the United States Commodity Futures Trading Commission (CFTC), and the United States Securities and Exchange Commission (SEC) have filed separate but related civil actions against him.

During the COVID-19 epidemic, crypto lending platforms like Celsius experienced substantial growth due to the increasing value of digital assets. These firms aimed to make profits by offering depositors quick access to loans at high-interest rates while lending tokens to institutional investors.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

#NFT #Web3 #Blockchain #Celsius #celsiusnetwork

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According to court records, Mashinsky pleaded not guilty to seven charges. His New York City residence and bank account will be used as collateral for the bond.

Following his arrest on fraud charges, a U.S. District Judge granted bail to Alex Mashinsky, the founder and former CEO of insolvent crypto lender Celsius, at $40 million.

Court records indicate that Mashinsky pleaded not guilty to seven charges, including deceiving investors and manipulating the price of the #CEL token.

The Department of Justice, the Federal Trade Commission, and federal securities and commodities agencies announced their intention to take action against Mashinsky and other officials on Thursday.

Agreement Terms: Travel and Account Restrictions for Mashinsky:

Mashinsky’s bail conditions include a prohibition on leaving the country and opening new financial or cryptocurrency accounts.

His wife will be the sole signatory on the bond, while the co-signatory’s identity remains undisclosed. His NYC residence and bank account serve as collateral.

Mashinsky’s attorneys assert his strong denial of the charges and vow to mount an aggressive defense in court.

Mashinsky Arrested in Celsius Investigation: DOJ Charges Filed:

Alex Mashinsky was arrested by the U.S. Department of Justice (DOJ) in New York on Thursday, linked to the collapse of crypto lender Celsius. The charges against Mashinsky and others include securities fraud, commodities fraud, wire fraud, and conspiracy related to the manipulation of Celsius’ token, CEL.

In July 2022, the lending platform Celsius declared bankruptcy, and its assets were recently acquired by the cryptocurrency consortium Fahrenheit. New York Attorney General Letitia James filed a lawsuit against Mashinsky in January, accusing him of misleading investors regarding the company’s financial condition before the bankruptcy filing.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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