Former Celsius Boss Seeking To Have FTC Case Dropped

Former Celsius Boss Seeking To Have FTC Case Dropped

The founder and the ex-CEO of the now-bankrupt crypto lending platform, Celsius, Alex Mashinsky, wants to have the lawsuit filed against him by the Federal Trade Commission (FTC) dropped completely.

On Monday, lawyers of the former CEO said in a court filing that the allegations made against their client about making misstatements for obtaining customer information fraudulently from a financial institution were not supported.

The argument

Yankwitt LLC represents the legal team of the former Celsius boss and it said that the accusations made against Mashinsky could not satisfy the claim requirements outlined in the GLBA.

This is the Gramm-Leach-Bliley Act introduced in 1999, which indicates that false statements should be knowingly made for asking a financial institution about customer information.

The lawyers also pointed out that Celsius has filed for bankruptcy and has already made a settlement agreement with the FTC.

Therefore, it is not possible to support the claim that Mashinsky has violated or is going to violate the law because he had stepped down from his position as CEO last year in September.

The Federal Trade Commission (FTC) had filed the lawsuit in question this year in July and it also includes other co-founders of Celsius, Hanoch ‘Nuke’ Goldstein and Shlomi Daniel Leon.

The response

The former has also contested the charges that were filed against him. According to Goldstein, he is being held responsible by the FTC primarily because of his association with other Celsius executives.

He considers this to be unjust. The filing said that Mashinsky was also joining the Motion to Dismiss filed by Goldstein because no claim of monetary relief had been made by the FTC under the GLBA.

Therefore, the lawyers stated that the court should grant Mashinsky’s request and dismiss the case against him in its entirety.

Lawyers claim that the FTC has sued Goldstein primarily because he retweeted a Celsius blog post. According to Goldstein, his action has been misinterpreted as being complicit in the alleged wrongdoing.

Another petition

A petition was also filed in court on Monday by Damian Williams in which the US Attorney requested that the FTC proceedings against Mashinsky be suspended temporarily.

This was requested to ensure there would be no possibility of prejudice in the concurrent criminal case against the former Celsius CEO.

The criminal charges that have been filed against Mashinsky include multiple counts of fraud and manipulation of the price of the native token of the Celsius lending platform, CEL.

The ex-CEO has pleaded not guilty to the said charges, which have been termed ‘baseless’ by his legal team.

Once, Celsius had been a force to be reckoned with in the crypto market, as it had more than $25 billion in assets under management back in 2021.

Users were permitted to deposit different digital assets on the platform for earning yields, or they could deposit their tokens for obtaining loans.

Last year, the downturn in the crypto market drove the company to bankruptcy and Mashinsky was arrested a year after the collapse of the platform.