Celsius Founder Mashinsky Defrauded Thousands for Billions in Crypto: NYAG
The New York attorney general’s lawsuit would ban Alex Mashinsky from doing business in New York and require him to pay damages

Celsius’ Alex Mashinsky | Kevin McGovern/Shutterstock.com modified by Blockworks
New York’s attorney general is suing the former CEO of bankrupt crypto lender Celsius Network, alleging that the executive defrauded hundreds of thousands of investors out of billions of dollars in crypto.
The civil lawsuit, filed by New York Attorney General Letitia James Thursday, alleges that ex-CEO Alex Mashinsky made false and misleading statements about Celsius’ safety to encourage investors to deposit digital assets onto the platform.
“As announced on September 27, 2022, Alex Mashinsky is no longer employed by Celsius and is not involved in the management of the company,” a Celsius spokesperson told Blockworks.
Mashinsky also failed to register as a salesperson for Celsius and as a securities and commodities dealer, the lawsuit states.
More than 26,000 New Yorkers were impacted, James said. The suit seeks to ban Mashinsky from doing business in New York and require him to pay damages, restitution and disgorgement.
“The law is clear that making false and unsubstantiated promises and misleading investors is illegal,” James said in a statement. “My office will stay vigilant and ensure that bad actors trying to take advantage of New York investors are held accountable.”
Mashinsky could not be immediately reached for comment.
The suit follows Celsius initiating bankruptcy proceedings in July, about one month after it halted withdrawals, citing “extreme market conditions.”
A federal bankruptcy judge ruled Wednesday that Celsius owns the tokens customers deposited into its interest-bearing accounts before filing for bankruptcy. The crypto was worth $4.2 billion in July 2022, and the firm had about 600,000 accounts in highest yield-bearing crypto products as it went bust.
This is not the first time James has pursued legal action against players in the crypto industry. She called on New York crypto investors in August to contact the Investor Protection Bureau if they had been “deceived” or affected by the market crash.
A settlement with Tether in February 2021 ousted the leading stablecoin from New York. The attorney general also sued crypto lender Nexo, a long-time Celsius rival, last September. James claimed Nexo failed to register with the state as securities and commodities brokers, and for lying to investors about its registration status.
A few months prior, in June, James reached a nearly $1 million settlement with BlockFi Lending for offering unregistered securities.
Updated Jan. 5, 2022 at 1:06 pm ET: Added comment from Celsius spokesperson.
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