Celsius’ Mashinsky Finally Sued by NY Attorney General


Key Takeaways

  • New York Attorney General Letitia James filed a civil suit against former Celsius CEO Alex Mashinsky today.
  • James claims Mashinsky defrauded investors by making false statements about the company’s financials.
  • She is seeking restitution, damages, and to bar Mashinsky from ever doing business in New York again.

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Former Celsius CEO Alex Mashinsky is being sued by the New York Attorney General for defrauding investors and making false statements about the company’s financials.

Mashinsky Feels the Heat

Alex Mashinsky is finally facing consequences for his mishandling of Celsius.

New York Attorney General Letitia James filed a civil lawsuit against the former Celsius CEO earlier today. The filing accuses Mashinsky of making false statements to investors about Celsius’ financial situation.

“Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York,” said James in a Twitter post. She claimed he had “defrauded” hardworking people by promising them big returns, but had only left them in “financial ruin.”

James stated she was suing Mashinsky for restitution and damages, and was seeking to ban him from operating businesses in New York ever again. Her office claims that 26,000 New Yorkers had deposited over $440 million in Celsius as of December 31, 2021.

Once a leading crypto lending company, Celsius froze customer fund withdrawals in early June, citing “extreme market conditions.” The firm subsequently filed for bankruptcy; the news was met with consternation, outrage, and threats of suicide from customers, some of whom claimed to have lost their entire life savings to the platform. 

Court filings subsequently revealed that the company had a $1.19 billion hole in its balance sheet. Celsius insiders have claimed the hole was partially due to Mashinsky using customer funds to directionally trade BTC—against the advice of multiple senior figures at the firm. Mashinsky thus reportedly lost $50 million of company funds in January 2022 alone.

Months after filing for bankruptcy, Mashinsky suggested rebranding Celsius to “Kelvin” and to move forward with the company by focusing on crypto custody services. He resigned shortly thereafter. 

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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Celsius’ Mashinsky Finally Sued by NY Attorney General

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