Alex Mashinsky, co-founder and former CEO of bankrupt crypto lending platform Celsius Network, has filed a response to New York Attorney General Letitia James' lawsuit against him. According to the document, the lawsuit has deficiencies in the presentation of the facts of the case and its legal argument and should be dismissed.
James claims in his lawsuit on behalf of the people of New York State that Mashinsky defrauded more than 26,000 New York residents out of billions of dollars, particularly by making false statements about the company's financial condition.
Mashinsky's answer alleges the lawsuit “misinforms like parrots,” shows a lack of understanding of Celsius's business, and asserts selective statements from Mashinsky's 180 weekly YouTube appearances. Furthermore, the lawsuit allegedly does not consider circumstances beyond Mashinsky's control, namely the crypto market downturn.
While the banks are not your friends @Mashinsky he is definitely your enemy
— Pete No Stop (@PeteNoStop) April 24, 2023
The response also criticizes the lawsuit's application of the Martin Act, New York's strict "blue sky" securities law, and other statutes. aforementioned on all seven charges in the case. The answer says:
"Because the Lawsuit does not establish a legally cognizable claim against Mashinsky and is deficient, it must be dismissed in its entirety."
James' lawsuit against Mashinsky it was announced on January 5 and changed in March. Notably, at least for Mashinsky's response, the lawsuit does not name Celsius as a defendant, only Mashinsky.
The creative lawyers who defend the scammer Alex @Mashinsky are claiming that #Celsius Earnings accounts are not securities, the rewards they offered were based on income.
Behold, the rarely used Ponzi defense! pic.twitter.com/f3OXG3elEm
— Camera crews (@camcrews) May 2, 2023
Celsius filed for bankruptcy on July 13, 2022 after pausing withdrawals a month before. Depositors still they have not received their money backthough Celsius settled with decentralized financial market makers Compound, Aave and Maker on the eve of their bankruptcy filing.
Related: Celsius creditors committee proposes to sue Mashinsky and other Celsius executives
A court-appointed independent examiner found many problems with the behavior of the company in a report issued in January. Examiner Shoba Pillay said the company paid out $1.36 billion more in rewards than it generated in revenue from customer assets between 2018 and June 30, 2022.
An auction of Celsius assets is scheduled for May 3, after several delays. bidders supposedly include Gemini and Coinbase.
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