Feb 15, 2023

Celsius Creditors Committee to Sue Execs for Fraud, Mismanagement

The Official Committee of Unsecured Creditors of Celsius has filed a proposed complaint in a New York Bankruptcy Court in order to sue Celsius co-founder Alex Mashinsky and other executives for their alleged role in the collapse of the crypto lender. The committee, comprised of seven Celsius account holders, was appointed by the U.S. Trustee in July and represents the interests of Celsius account holders and unsecured creditors.

In a statement released on February 14, the committee said that their investigations into the current and former directors, officers, and employees of Celsius have uncovered significant claims and causes of action based on fraud, recklessness, gross mismanagement, and self-interested conduct. The proposed lawsuit seeks damages in an amount to be proven at trial and aims to bring claims and causes of action against the following Celsius executives, persons and their associated entities: Alex Mashinsky, co-founder, director and former CEO; Daniel Leon, co-founder, director and former CSO and chief operating officer; Hanoch “Nuke” Goldstein, co-founder and chief technology officer; Harumi Urata-Thompson, former chief financial officer and chief investment officer; Johannes Treutler, former head of Celsius’ trading desk and person in charge of purchasing CEL tokens on behalf of Celsius; Aliza Landes, the former vice president of Lending of Celsius and spouse of Daniel Leon; and Kristine Mashinsky, the spouse of Alex Mashinsky.

The complaint alleges that the defendants breached their fiduciary obligations to Celsius by knowingly promising their customers interest payments that the company could not afford, and by making negligent, reckless (and sometimes self-interested) investments that caused Celsius to lose over one billion dollars in a single year. The complaint further alleges that the defendants mismanaged the company, resulting in another quarter-of-a-billion dollar loss due to their inability to adequately account for the company’s assets and liabilities.

The complaint also alleges that the defendants directed Celsius to spend “hundreds of millions of dollars” on public markets to inflate the price of CEL tokens, while secretly selling tens of millions of CEL tokens (or were aware of such sales) for their own benefit. Finally, the complaint alleges that the defendants withdrew assets from the company when it became apparent that Celsius would be required to file for bankruptcy, while actively encouraging customers to keep their assets on the Celsius platform.

The proposed complaint is the first step in the committee’s investigation into potential former Celsius executive wrongdoings and the return of assets to victims. A hearing on the proposed complaint will be held on March 8.

The committee’s goal is to maximize recoveries for the benefit of Celsius’ customers and unsecured creditors who were victims of the negligent, reckless, and fraudulent conduct of Mr. Mashinsky and others. The committee hopes that the proposed lawsuit will help to bring justice to those who have been affected by the collapse of Celsius.

The web3 space has been abuzz with news of the proposed lawsuit against Celsius executives. As the lawsuit progresses, many are wondering how the outcome could affect the NFT market, as well as the crypto industry as a whole.

The ability to sell NFTs is a key component of the web3 space, and news of the proposed lawsuit has raised questions about the safety of investing in NFTs. In response, many NFT marketing agencies are offering advice on how to safely sell NFTs. These agencies are providing resources to help NFT sellers understand the risks associated with investing in digital assets and are offering services such as Twitter NFT marketing and NFT promotion to help NFT sellers reach a wider audience.

As the lawsuit continues to unfold, it is important for those interested in the web3 space to stay informed. By working with a reputable web3 agency, NFT sellers can ensure that they are taking the necessary steps to protect their investments and maximize their profits.

Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.