Celsius founder Alex Mashinsky has filed a motion to dismiss the complaint filed by the Attorney General of New York.
The lawsuit accused Mashinsky of misleading and defrauding the investors of his crypto lending firm.
The former CEO has dismissed the allegations made in the lawsuit and called them “baseless”.
Alex Mashinsky, the man behind the failed crypto lending firm Celsius, has filed a motion in the Supreme Court of New York to dismiss a complaint filed against him by the state of New York in January this year. Mashinsky’s lawyers responded by claiming that the fraud claims made against him by New York Attorney General Letitia James, are baseless and derived from online misinformation.
Alex Mashinsky: Crypto Products Offered By Celsius Were Not Securities
The lawsuit was filed by the State of New York against Alex Mashinsky for defrauding hundreds of thousands of investors out of billions of dollars worth of crypto assets. The lawsuit alleged that Mashinsky repeatedly made false and misleading statements regarding Celsius’ safety to encourage investors to deposit billions worth of crypto into the crypto lender. Attorney General James further alleged that amid last year’s crypto contagion, Mashinsky misrepresented and concealed the financial health of his company.
According to the court filing by the former CEO’s lawyers, the allegations made in the lawsuit “parrot misformation” on the internet about Mashinsky and Celsius. They claimed that the “baseless” conclusions in the complaint demonstrated a fundamental misunderstanding of the bankrupt crypto lender’s business and the role that the former CEO played in it. In the response, Mashinsky’s lawyers claimed that Celsius’ bankruptcy was blamed on him despite being caused due to external events that were out of his control.
The Complaint cynically cherry picks fragments of statements and sound bites, without broader context, falsely depicting Celsius’s exceptional transparencies with its users as a deceptive tactic.”
Speaking on the allegation of perpetrating securities fraud by failing to register Celsius as a securities dealer and offering securities through the platform, Alex Mashinsky’s lawyers stated that the Earn Accounts offered to customers were not securities. “The Complaint fails to plead adequately the existence of securities or commodities in Celsius’s business model,” the lawyers argued. The response also cited several legal precedents to argue that no investment contract exists between the firm and the investor without a predetermined interest rate.