Key points to remember
- Celsius creditors have filed a lawsuit against Alex Mashinsky and other Celsius executives.
- They seek to recover the millions that the leaders would have collected before the bankruptcy of the company.
- The lawsuit follows a report claiming that Celsius was operated in a ponzi fashion.
Share this article
Former Celsius executives (and their wives) now face a lawsuit from their creditors.
Lose over a billion dollars in a year
The walls are closing in on Alex Mashinsky.
Celsius creditors filed a 154-page complaint against Celsius executives yesterday for their fraudulent conduct while at the helm of the company. The lawsuit seeks to recoup the millions that former CEO Alex Mashinsky and other prominent members of the company allegedly banked for themselves before the crypto lender went bankrupt.
The court document claims that Mashinsky, co-founder Daniel Leon, co-founder Nuke Goldstein, former chief financial officer Harumi Urata-Thompson, former chief compliance officer Jeremie Beaudry and former head of trading desk Johannes Treutler have all breached their fiduciary duties on a number of occasions. He further clarifies that two of their wives, Kristine Mashinsky and Aliza Landes, were also involved.
“They made negligent, reckless (and sometimes self-serving) investments that cost Celsius 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 then cashing in on millions of dollars by selling its own CEL holdings. And while other crimes appear to have been perpetrated by Mashinsky alone — using client funds to trade bitcoin directionally or misrepresenting Celsius’s financial condition — creditors have accused other executives of remain “arms crossed” and “cover it”.
The claims set forth by the lawsuit appear partially based on a 689-page court-ordered document independent report on Celsius published two weeks ago, in which examiner Shoba Pillay came to the conclusion that the crypto lending firm had been operated in a ponzi fashion.
New York Attorney General Letitia James also filed a complaint against Mashinsky in early January, accusing him of defrauding New Yorkers and leaving them in “financial ruin”.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.