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NEW YORK (AP) The former CEO of bankrupt cryptocurrency lending platform Celsius Network misled investors, setting them on a path to financial ruin,” the New York Attorney General said Thursday, Letitia James, in a lawsuit against Alex Mashinsky who seeks to prohibit her from doing business in the state.
In his lawsuit in Manhattan state court, James said Celsius co-founder Mashinsky engaged in a scheme to defraud hundreds of thousands of investors “by coercing them into putting billions of their digital assets in its platform.
The lawsuit alleges that Mashinsky promised big returns and said Celsius was as safe as a bank, but in the meantime engaged in risky investments and did not tell investors when those investments failed.
Celsius filed for bankruptcy last year, after suspending operations in June.
Emails seeking comment have been sent to Mashinsky’s attorneys.
Celsius’ failure was part of a series of problems in the cryptocurrency industry last year, along with the collapse of stablecoin Terra and the implosion of lending platform FTX.
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