The New York State Attorney General’s Office has filed a lawsuit against the former CEO of the Celsius cryptocurrency platform, accusing him of defrauding more than 26,000 residents of America’s main business center.
The lawsuit was filed on Thursday, January 5, after it became known that the bankrupt data center operator Core Scientific intends to disable 37,000 Celsius mining devices due to lack of payment. The Letitia James lawsuit alleges that Alex Mashinsky repeatedly made misleading statements about the safety of Celsius, which led to hundreds of thousands of investors in multi-billion dollar losses. Among the victims were tens of thousands of New Yorkers.
According to the prosecutor, Mashinsky promoted Celsius as a safe alternative to banks, while hiding the fact that the cryptocurrency lender is actually using risky investment strategies. James intends to obtain an injunction so that Mashinsky can no longer conduct such activities in New York.
“Alex Mashinsky promised to lead investors to financial freedom, but led them to the path of financial ruin. The law is clear that it is illegal to make false promises and mislead investors. We are taking action on behalf of the thousands of New Yorkers who were defrauded by Mashinsky to make amends. Law enforcement officers will continue to prosecute attackers who are trying to steal the funds of New York investors,” said Letitia James.
Attorney General Letitia James demanded in 2021 that all unregistered cryptocurrency lending platforms stop operating in the state, and in November petitioned Congress to ban the investment of retirement savings in cryptocurrencies.
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