Former Celsius Network Head Sued for Defrauding Investors of Billions

• New York’s attorney general Letitia James has revealed that she is suing the former Celsius Network head for defrauding investors out of billions of dollars.
• Celsius Network filed for Chapter 11 bankruptcy in July 2022, citing “extreme market conditions.”
• The CEO resigned in September, shortly after he reportedly withdrew $10 million from Celsius weeks before the company stopped withdrawals.

The New York State Attorney General Letitia James recently announced on Twitter that she is suing the former Celsius Network head Alex Mashinsky for defrauding investors out of billions of dollars. The news comes at a time when the crypto industry is already facing a slew of legal battles.

In July of 2022, Celsius Network filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of New York. The crypto company said filing for bankruptcy would help stabilize the company and develop a restructuring plan. Prior to filing for bankruptcy, Celsius had halted customer withdrawals in June due to “extreme market conditions.”

In September, Alex Mashinsky stepped down from his position as Celsius Network’s CEO. His resignation came shortly after he reportedly withdrew $10 million from the company weeks before it stopped allowing customer withdrawals.

The lawsuit brought forth by the attorney general is expected to be the first of many to come against Mashinsky and the crypto company. If found guilty of defrauding investors, Mashinsky could face hefty fines and jail time. The case is currently pending and no further information has been released yet.

It is important to remember that the crypto industry is still in its nascent stages and is subject to numerous legal battles, such as the one against Mashinsky. It is crucial that investors do their due diligence and be aware of the risks before investing in any cryptocurrency.