Celsius Founder Alex Mashinsky Seeks Dismissal of FTC Case Amid Legal Battles
Bankrupt Celsius Founder Alex Mashinsky Asks Court to Dismiss US FTC Case
Former Celsius CEO, Alex Mashinsky, entangled in legal turmoil following his company's bankruptcy and subsequent arrest, is now endeavoring to persuade the Federal Trade Commission (FTC) to drop its case against him.
In a recent court filing, Mashinsky's legal team contends that the FTC's allegations lack the essential elements required to substantiate claims of fraudulent activity.
Celsius, a cryptocurrency lending platform, filed for bankruptcy during challenging market conditions, leading to legal actions against Mashinsky from various law enforcement agencies.
Mashinsky's Multiple Fraud Charges
Among the charges levied against Alex Mashinsky are numerous counts of fraud and manipulation of the CEL token's price. His defense team vehemently disputes these charges, labeling them as "baseless."
Mashinsky's legal team is not only seeking the dismissal of the fraud accusations but also contesting the FTC's claims that he misled investors.
Specifically, Mashinsky's lawyers argue that the allegations fail to meet the criteria for a claim under the Gramm-Leach-Bliley Act. This 1999 law mandates knowingly false statements to fraudulently obtain customer information from a financial institution.
Former Celsius CTO Also Contests FTC Charges
In addition to Mashinsky's legal maneuvers, his former Chief Technology Officer, Hanoch "Nuke" Goldstein, is also challenging the charges. Goldstein contends that the FTC is unfairly holding him accountable by association with other Celsius executives.
The FTC's case against Goldstein appears to hinge on his retweeting of a Celsius blog post, a move he believes is being misconstrued as complicity.
Meanwhile, U.S. Attorney Damian Williams has requested a temporary halt to the FTC proceedings to prevent prejudicing the concurrent criminal case against Mashinsky.
Alex Mashinsky, who resigned as CEO in September 2022 during the bankruptcy proceedings, was released on a $40 million bond. However, his financial situation has grown increasingly precarious, with a recent court order freezing his banking and real estate assets.
The legal battles surrounding Celsius and its founder continue to unfold, with significant implications for the future of both the individual and the company.