The Challenge to New York Attorney General’s Claims
In a dramatic response to New York Attorney General Letitia James, former Celsius Network CEO Alex Mashinsky has pulled out the legal big guns. His motion argues that James’ suit is a masterpiece of misinformation, misconstruing the facts and conveniently ignoring some critical context. According to Mashinsky, who has made more than 180 debatable appearances on YouTube, the AG’s claims are largely based on misleading cherry-picked statements.
Defending Against the Defrauding Allegations
James’ federal lawsuit aims at Mashinsky for allegedly defrauding over 26,000 New Yorkers out of billions by painting a false picture of Celsius’ financial health. Mashinsky plans to counter-attack by highlighting the external factors, like the dumpster fire that was the cryptocurrency market downturn. It’s hard not to chuckle at Mashinsky’s antics; he seems to be leaning into the classic “it’s not me, it’s the market” defense.
The Martin Act Conundrum
Adding more spice to the legal stew, Mashinsky’s lawyers are throwing shade at the application of the Martin Act—New York’s iconic blue sky securities regulation. They claim the lawsuit fails to establish any legally recognizable wrongdoing on his part. As they put it: “Because the Complaint fails to state a legally-cognizable claim against Mashinsky and is otherwise deficient, it should be dismissed in its entirety.” This laundry list of objections promises to keep the courtroom entertained.
Celsius’ Rocky Road to Bankruptcy
For context, Celsius declared bankruptcy on July 13, 2022, following a withdrawal pause that left depositors gnashing their teeth. It’s been a sad saga with investors hoping and praying for their money back ever since. Meanwhile, the company found itself in a background skirmish with decentralized finance giants like Compound, Aave, and Maker while desperately trying to salvage assets.
Insights from the Court-Appointed Examiner
A report from the independent examiner revealed that Celsius had paid a staggering $1.36 billion more in rewards than it ever could cover from its earnings. This has led to eyebrows raising and questions surfacing about who truly deserves a seat in the courtroom of public opinion.
The Upcoming Auction and What Lies Ahead
The drama continues with an auction of Celsius assets that has been pushed back more times than a high school prom date. Scheduled for May 3, bidders reportedly include cryptocurrency platforms Gemini and Coinbase. What could possibly go wrong? Stay tuned as we watch this legal battleground unfold, with Mashinsky at the helm of the chaos.
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