Attorney General James Sues Former CEO Of Celsius Cryptocurrency Platform

New York Attorney General Letitia James today filed a lawsuit against Alex Mashinsky.

A co-founder and former CEO of cryptocurrency lending platform Celsius Network LLC and its related entities (Celsius), for defrauding hundreds of thousands of investors, including more than 26,000 New Yorkers, out of billions of dollars worth of cryptocurrency.

The lawsuit alleges that Mashinsky repeatedly made false and misleading statements about Celsius’s safety to encourage investors to deposit billions of dollars in digital assets onto the platform.

As Celsius lost hundreds of millions of dollars of assets in risky investments, Mashinsky misrepresented and concealed Celsius’s deteriorating financial condition. Mashinsky also failed to register as a salesperson for Celsius and as a securities and commodities dealer.

Attorney General James’ lawsuit seeks to ban Mashinsky from doing business in New York and require him to pay damages, restitution, and disgorgement. 


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“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin,” said Attorney General James. “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. My office will stay vigilant and ensure that bad actors trying to take advantage of New York investors are held accountable.”

Celsius is a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for promises of high yields on digital assets. Mashinsky was Celsius’s public face, appearing regularly in interviews, at cryptocurrency conferences, and on social media to promote the platform and recruit investors.

Mashinsky made numerous false and deceptive statements about Celsius’s safety, number of users, and investment strategies to recruit investors, and repeatedly asserted that Celsius was safer than a bank.

However, banks are highly regulated by state and federal government agencies and subject to regular and robust examinations, while Celsius was not subject to such regulatory requirements. Neither Celsius nor its customers had any hope of receiving the same protections as banks. 

Mashinsky repeatedly claimed that Celsius made safe, low-risk investments and only lent assets to credible and reputable entities. However, investors’ assets were routinely exposed to high-risk counterparties and strategies, many of which resulted in losses that Mashinsky concealed from investors.

The collapse of Celsius has left many individuals in financial ruin. One New York resident mortgaged two properties to invest with Celsius. A disabled veteran lost his investment of $36,000, which had taken him nearly a decade to save up. Another disabled citizen, who depended upon government assistance to supplement his $8 per hour income, lost his entire investment.

Through her lawsuit, Attorney General James seeks to permanently bar Mashinsky from engaging in any business relating to the issuance, offer, or sale of securities or commodities in New York; stop him from serving as a director or officer of any company doing business in New York; and secure disgorgement of any proceeds derived from Mashinsky’s unlawful conduct, as well as damages and restitution for investors.



This lawsuit continues Attorney General James’ efforts to enforce New York laws in the cryptocurrency industry and protect New York investors. In September 2022, Attorney General James sued Nexo Inc. and Nexo Capital Inc. for operating illegally and defrauding investors. In June 2022, Attorney General James warned New Yorkers of the dangerous risks of investing in cryptocurrencies after the market reached then-record lows. Also in June, Attorney General James reached a nearly $1 million settlement with crypto platform BlockFi Lending LLC for offering unregistered securities. Last March, Attorney General James issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, Attorney General James directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations. In March 2021, Attorney General James warned New Yorkers of the risks of cryptocurrency investments and reminded investment platforms of their legal obligations.

Attorney General James once again urges New Yorkers who have been affected by deceptive conduct in the virtual assets market to report these issues to OAG

Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.

The case is being handled by Assistant Attorneys General Tanya Trakht and Jesse Devine and Senior Enforcement Counsel Matthew Woodruff of the Investor Protection Bureau, with assistance from Legal Assistant Charmaine Blake, also of the Investor Protection Bureau, and Detective Investigator Brian Metz of the Investigations Division.

The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Acting Deputy Bureau Chief Ken Haim and is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.

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