Alex Mashinsky, the founder and former CEO of the now-bankrupt cryptocurrency lending firm Celsius, has filed a fresh court motion in an attempt to have the U.S. Federal Trade Commission's (FTC) case against him completely dismissed. Mashinsky's legal team argued that the allegations against their client did not constitute a claim that he knowingly made false statements with the intent of fraudulently obtaining customer information from a financial institution. They contended that the charges did not meet the criteria for claims under the Gramm-Leach-Bliley Act, a 1999 law that requires knowingly making false statements to fraudulently collect customer information from a financial institution.
Furthermore, Mashinsky's attorneys claimed that because he resigned as Celsius CEO on September 27, 2022, the indictment failed to demonstrate that he was "violating" or "about to violate" the law. This line of argument is crucial in their bid to dismiss the case.
In July, the FTC imposed a $4.7 billion fine on the bankrupt cryptocurrency lender Celsius Network and also filed a lawsuit against its founders, including Alex Mashinsky, Shlomi Daniel Leon, and Hanoch “Nuke” Goldstein. Goldstein's legal team argued that the FTC's suit against him seemed to be based on the mere act of retweeting a Celsius blog post. Goldstein asserted that such behavior had been misinterpreted as a sign of complicity or involvement in alleged wrongdoing.
Prior to its collapse in 2022, Celsius was one of the largest cryptocurrency lending platforms in the industry, with Mashinsky serving as its leader. However, he resigned as CEO later that September. By the end of 2022, the U.S. Department of Justice had indicted the former CEO on multiple criminal fraud charges. Mashinsky has pleaded not guilty to these charges and is currently free on $40 million bail.
