Former Celsius Network Alex Mashinsky will now have to defend himself against a lawsuit filed by New York Attorney General Letitia James after a New York County Supreme Court Justice rejected his attempts to have the suit dismissed. The court’s decision blocks the attempt by Mashinsky to stop James from seeking to preclude him from issuing securities or serving as a company officer in the state.
Mashinsky Misstatements Induced Investors to Deposit Assets on Celsius
A United States judge has rejected former Celsius Network CEO Alex Mashinsky’s attempt to have the court dismiss a lawsuit filed by New York Attorney General (NYAG) Letitia James, a report has said. The court’s decision blocks the attempt by Mashinsky to stop James from seeking to preclude him from issuing securities or serving as a company officer in the state.
In her judgment, New York County Supreme Court Justice Margaret Chan reportedly argued that James’ lawsuit should be allowed to stand because there are enough accusations to sustain the case against Mashinsky.
“There are sufficient allegations to support a plausible inference that Mashinsky’s alleged misstatements induced or promoted new investors to deposit assets in Celsius’ earned-interest accounts,” Justice Chan said in her ruling.
Mashinsky’s Misrepresentation of Celsius’ Financial Condition
As reported by Bitcoin.com News in January, James is said to have filed the lawsuit against Mashinsky after it became of the former CEO’s false and misleading statements about Celsius Network’s financial well-being. In addition, the former boss of the collapsed crypto lender is also accused of encouraging thousands of investors to deposit onto the platform digital assets worth billions of dollars.
In response to the NYAG’s lawsuit, Mashinsky filed a motion to dismiss the lawsuit on the basis that the alleged misleading statements were in fact “nonactionable puffery” and immaterial. However, according to the Bloomberg report, Justice Chan did not agree with Mashinsky’s characterization of his interactions with the crypto lender’s investors.
Instead, she suggested in her ruling that the allegations against Mashinsky depict an “individual actively misrepresenting the financial condition of his company to keep it afloat.”
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