Celsius Creditors Sue Mashinsky, Other Executives

Key Takeaways

• Celsius creditors have filed a lawsuit against Alex Mashinsky and other Celsius executives.
• They seek to recover the millions that executives allegedly cashed out before the company went bankrupt.
• The lawsuit comes on the heels of a report that claimed that Celsius was operated in a ponzi-like manner.

Former Celsius executives (and their wives) are now facing a lawsuit from their creditors.

Losing More Than $1 Billion in a Year

The walls are closing in on Alex Mashinsky.

Celsius creditors filed a 154-page lawsuit against Celsius executives yesterday over their fraudulent conduct while at the company’s helm. The suit seeks to recover the millions that former CEO Alex Mashinsky and other prominent company members allegedly cashed out for themselves before the crypto lender went bankrupt.

The court document claims that Mashinsky, co-founder Daniel Leon, co-founder Nuke Goldstein, former chief financial officer Harumi Urata-Thompson, former chief compliance officer Jeremie Beaudry, and former trading desk head Johannes Treutler all breached their fiduciary obligations on a number of occasions. It further states that two of their spouses, Kristine Mashinsky and Aliza Landes, were also implicated.

“They made negligent, reckless (and sometimes self-interested) investments that caused Celsius to lose more than $1 billion in a single year,” stated the creditors. The suit further accused the group of inflating the price of the company’s CEL token with customer funds, and of subsequently cashing out millions of dollars by selling their own CEL holdings. And while other crimes seem to have been perpetuated by Mashinsky alone—using customer funds to directionally trade bitcoin, or making false statements about Celsius’ financial condition—the creditors accused other executives of sitting “idly by” and “covering up” for him.

The claims laid out by the suit appear partially based on an 689-page, court-ordered, independent report on Celsius published two weeks ago, in which examiner Shoba Pillay came to the conclusion that the crypto lending company had been operated in a ponzi-like manner.

New York Attorney General Letitia James also filed a lawsuit against Mashinsky in early January, accusing him of defrauding New Yorkers and leaving them in “financial ruin.” 

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.