Alex Mashinsky, co-founder and former CEO of crypto lender Celsius Network, has taken action against a New York State complaint seeking compensation to anyone who lost money in the collapse of the crypto lender, which once had $30 billion in assets.
Faulty Cryptocurrency Celsius Network Co-Founder And Ex-CEO Alex Mashinsky Denies Allegations About Him
The complaint alleges that Mashinsky engaged in securities fraud by making false and misleading statements to consumers about the safety of assets invested in Celsius, and failed to register as a seller of securities or commodities.
Mashinsky argues that Celsius's collapse was caused by external forces.
In his response yesterday, Mashinsky said that the crypto products offered by Celsius are neither securities nor commodities, and that New York State Attorney General Letitia James had selected Mashinsky's statements from hundreds of hours of YouTube broadcasts, adding that "Celsius' outstanding transparency with its users has been falsely misused as a deceptive tactic. argues that he portrayed it in such a way.
"The complaint about Mashinsky and the Celsius Network, which parrots misinformation on the internet and borrows groundless conclusions from others, demonstrates a fundamental misunderstanding of Celsius's work and Mashinsky's role here," says Mashinsky.
Celsius ran into trouble last year after the collapse of the TerraUSD stablecoin, which was pegged to the value of the US dollar through an algorithmic relationship with another token, LUNA.
LUNA could be exchanged directly for TerraUSD and was burned or minted to increase supply and demand for TerraUSD in order to force the value of TerraUSD to remain at $1 per coin.
However, both cryptocurrencies were not actually backed by US dollar reserves, and in the end, investors massively sold both LUNA and TerraUSD, losing more than $40 billion and the projects collapsed at that time. The effects of this resulted in the collapse of many cryptocurrency companies such as Celsius Network.
*Not investment advice.