Alex Mashinsky/WebSummit/CC BY-2.0.
Celsius founder sued for defrauding investors of billions of dollars
The New York attorney general is suing former Celsius CEO Alex Mashinsky and seeks to bar him from doing business in the city.

In the latest scandal in crypto land, New York’s attorney general has sued Celsius Network co-founder and former CEO Alex Mashinsky for defrauding “hundreds of thousands of investors”.
Mashinsky allegedly defrauded investors – including more than 26,000 New Yorkers – out of billions of dollars worth of cryptocurrency by concealing the status of the now-bankrupt company.
According to the lawsuit, Mashinsky lied to investors, concealed the crypto lending platform’s “dire financial condition” and failed to register as required by state law.
Celsius, established in 2017, went bankrupt in the unprecedented crypto crash of the summer with Mashinsky as CEO at the time.
It froze customer withdrawals in June, filed for bankruptcy in July and Mashinsky resigned from his post as CEO in September.
“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin,” attorney general Letitia James said.
“The law is clear that making false and unsubstantiated promises and misleading investors is illegal.
“Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses.”
James said her office will “stay vigilant” and ensure that “bad actors” trying to take advantage of New Yorkers are held accountable.
According to the attorney general’s office, Mashinsky made “numerous false and deceptive statements” about the company’s safety, number of users and investment strategies to recruit investors, repeatedly saying that Celsius was safer than a bank.
Meanwhile, the platform was concealing hundreds of millions of dollars of losses in risky investments and was not subject to the same regulatory requirements as banks (see the “Banks are not your friends” t-shirt, pictured).
Among the New Yorkers affected by Celsius’s actions was a disabled veteran that lost his investment of $36,000 which took him nearly a decade to save, and another disabled citizen that lost his entire investment, the attorney general’s office said.
The civil lawsuit is seeking to ban Machinsky from doing business in New York in the future and to have him pay damages and restitution to investors.
This lawsuit is the latest in the series of many in a government effort in the US to enforce laws in the crypto industry and make the space safer for consumers.
It follows the charges brought forth against FTX CEO Sam Bankman-Fried of widespread fraud last month, a $100m settlement reached with Coinbase over anti-money laundering failures this week and numerous warnings about the risks of investing in cryptocurrencies.