Crytpocurrency Lending Founder Sued by NY Attorney General

Celsius defrauded investors, according to Attorney General's complaint

A co-founder of the cryptocurrency lending platform known as Celsius is being sued by the Attorney General of New York for allegedly defrauding investors.

New York's Attorney General, Letitia James, is suing Celsius co-founder Alex Mashinsky for his role in the Celsius cryptocurrency lending platform that James alleges defrauded investors.

According to James, more than 26,000 New Yorkers were victims of a scam perpetrated by Mashinsky and Celsius.

“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin,” said Attorney General James. “The law is clear that making false and unsubstantiated promises and misleading investors is illegal. Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses. My office will stay vigilant and ensure that bad actors trying to take advantage of New York investors are held accountable.”

Celsius is a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for promises of high yields on those digital assets. Mashinsky was Celsius’s public face, appearing regularly in interviews, at cryptocurrency conferences, and on social media to promote the platform and recruit investors. Mashinsky made numerous false and deceptive statements about Celsius’s safety, number of users, and investment strategies to recruit investors, and repeatedly asserted that Celsius was safer than a bank. However, banks are highly regulated by state and federal government agencies and subject to regular and robust examinations, while Celsius was not subject to such regulatory requirements. Neither Celsius nor its customers had any hope of receiving the same protections as banks. 

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