Letitia James, New York state's attorney general, filed a lawsuit Thursday against Alex Mashinsky, the co-founder and former CEO of failed cryptocurrency lender Celsius Network ( CEL-USD ), for defrauding hundreds of thousands of investors out of billions of dollars worth of digital coins. The civil lawsuit alleged that Mashinsky, between 2018 and at least June 2022, made false statements and misled investors about the financial condition of Celsius, which filed for bankruptcy in July 2022, to encourage them to keep depositing crypto. Moreover, he was accused of making deceptive statements about his firm's safety, number of users, and investment strategies to recruit investors. He even claimed that Celsius, which allowed investors to deposit their crypto in return for huge yields, "was safer than a bank," James noted. New York seeks to ban Mashinsky from conducting business in the state and require him to pay damages, restitution and disgorgement, James said. He "promised to lead investors to financial freedom but led them down a path of financial ruin,” she added. "Making false and unsubstantiated promises and misleading investors is illegal." Earlier, U.S. judge ruled that Celsius owns most of its customer deposits .
