Gemini

Celsius

<p>Celsius Network founder Alex Mashinsky &#8211; who was accused of defrauding investors out of billions of dollars in crypto by concealing the failing health of his now-bankrupt lending platform &#8211; has filed a response seeking to dismiss the New York State complaint against him.</p>
<p>The complaint was filed by New York State Attorney General Letitia James in January. It claimed that Mashinsky persisted in promoting Celsius as a safe alternative to banks, but users had to pay interest as high as 17% on deposits.</p>
<p>The civil lawsuit seeks to prohibit the exec from doing business in the New York state and compel him to compensate damages for violating laws such as the state&#8217;s Martin Act, which gives the NYAG broad power to pursue securities fraud cases.</p>
<h2 id="mashinsky-8217-s-response">Mashinsky&#8217;s Response</h2>
<p>In a newly <a href="https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=/mPuBL5LQ5Z2OEWZ70pvhw==" target="_blank" rel="noopener" data-wpel-link="external">filed</a> defense motion, the 57-year-old Mashinsky argued that the <a href="https://cryptopotato.com/new-york-ag-sues-celsius-co-founder-alex-mashinsky-for-alleged-fraud/" target="_blank" rel="noopener" data-wpel-link="internal">complaint</a> composed by NYAG &#8220;parrots misinformation&#8221; about him and Celsius Network and &#8220;borrows others&#8217; baseless conclusions.&#8221; The former exec further added that the civil lawsuit against him &#8220;demonstrates a fundamental misunderstanding&#8221; of the lender&#8217;s business, as well his role.</p>
<p>The filing contended NYAG of falsely pinning Celsius&#8217; losses on the alleged misstatements on Mashinsky alone. It claimed that the company&#8217;s fall was a result of a liquidity crisis and circumstances outside of the exec&#8217;s (and Celsius’) control.</p>
<p>The response further alleges James&#8217;s lawsuit of &#8220;cherry-picking&#8221; fragments of statements and sound bites without broader context and denied claims of Celsius offering in securities nor commodities services.</p>
<h2 id="messy-record-keeping">Messy Record-Keeping</h2>
<p>The latest development comes amidst an auction with bidders vying to take over Celsius&#8217; business. Leading crypto exchanges Coinbase and Gemini have <a href="https://cryptopotato.com/coinbase-and-gemini-join-bid-race-for-celsius-networks-assets-report/" target="_blank" rel="noopener" data-wpel-link="internal">joined</a> the bidding race.</p>
<p>The embattled lender was also accused of poor record-keeping and glaring deficiencies in its internal systems. As a result, Celsius sought to <a href="https://cryptopotato.com/celsius-calls-for-consolidating-us-and-uk-entities-amidst-poor-record-keeping-allegations/" target="_blank" rel="noopener" data-wpel-link="internal">consolidate</a> its UK-based entity, Celsius Network Limited (CNL), and its US-based entity, Celsius Network (LLC), in hopes of getting its books in order.</p>
<p>The post <a href="https://cryptopotato.com/former-celsius-ceo-alex-mashinsky-files-defense-motion-in-response-to-nyags-complaint/" rel="nofollow">Former Celsius CEO Alex Mashinsky Files Defense Motion in Response to NYAG&#8217;s Complaint</a> appeared first on <a href="https://cryptopotato.com/" rel="nofollow">CryptoPotato</a>.</p>

Former Celsius CEO Alex Mashinsky Files Defense Motion in Response to NYAG’s Complaint

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