Celsius Founder Alex Mashinsky Sued For Fraud BY New York Attorney General

The lawsuit against Mashinsky seeks to ban the Celsius founder from conducting business in New York. Attorney General James’s lawsuit is also after damages, disgorgement, and restitution.

$4.2 Billion In Earn Accounts Belongs To Celsius, Not Investors

Judge Martin Glenn ruled that $4.2 billion in crypto assets deposited to Celsius yielding bearing accounts belongs to the bankrupt crypto lender. The ruling means that some 600,000 account holders in Celsius’ earn program must wait until bankruptcy proceedings play out which could take months or years. 

The Court concludes, based on Celsius’s unambiguous Terms of Use, and subject to any reserved defenses, that when the cryptocurrency assets (including stablecoins, discussed in detail below) were deposited in Earn Accounts, the cryptocurrency assets became Celsius’s property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became property of the Debtors’ bankruptcy estates (the “Estates”).

The beleaguered crypto lender is expected to submit a restructuring plan to the bankruptcy court by February 15, 2023. 

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