Celsius creditors sue Mashinsky, other executives
Important takeaways
- Celsius creditors have filed a lawsuit against Alex Mashinsky and other Celsius executives.
- They are trying to get back the millions that executives allegedly paid out before the company went bankrupt.
- The lawsuit comes on the heels of a report that claimed Celsius operated in a Ponzi-like fashion.
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Former Celsius executives (and their wives) are now facing a lawsuit from their creditors.
Loses more than 1 billion dollars in a year
The walls are closing in on Alex Mashinsky.
Celsius creditors filed a 154-page lawsuit against Celsius executives yesterday over their misconduct while at the company’s helm. The lawsuit seeks to recover the millions that former CEO Alex Mashinsky and other prominent company members allegedly paid themselves before the crypto lender went bankrupt.
The court document alleges that Mashinsky, co-founder Daniel Leon, co-founder Nuke Goldstein, former CFO Harumi Urata-Thompson, former chief compliance officer Jeremie Beaudry and former trading desk manager Johannes Treutler all breached their fiduciary duties on a number of occasions. It further states that two of their spouses, Kristine Mashinsky and Aliza Landes, were also involved.
“They made negligent, reckless (and sometimes self-interested) investments that caused Celsius to lose more than $1 billion in a single year,” the creditors said. The suit further accused the group of inflating the price of the company’s CEL token with customer funds, and of paying out millions of dollars by selling its own CEL holdings. And while other crimes appear to have been perpetuated by Mashinsky alone—using customer funds to trade bitcoin, or making false statements about Celsius’ financial condition—creditors accused other executives of sitting “in the passive” and “covering up ” for him.
The claims made by the lawsuit appear based in part on a 689-page court order, independent report on Celsius published two weeks ago, where inspector Shoba Pillay came to the conclusion that the crypto-lending company had been run in a ponzi-like manner.
New York Attorney General Letitia James, too file a lawsuit against Mashinsky in early January, accusing him of defrauding New Yorkers and leaving them in “financial ruin.”
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH and several other crypto assets.
