Mashinsky

Celsius creditors have started a class action lawsuit to get back money they claim was fraudulently taken by the founder and other high-level executives before the company fell apart. They are now targeting the personal earnings of Alex Mashinsky, his wife, and several other key people at the firm who all withdrew money just before the company’s collapse.

The CEL price was heavily manipulated

Court documents filed Tuesday allege that Mashinsky and his team heavily manipulated the CEL token price and made “negligent, reckless and sometimes self-interested investments”.

This is viewed as a clear abnegation of their corporate responsibility, and has been a huge cause for concern amongst regulators, who have been gifted a further impetus to take heavy handed measures against the centralised crypto lending space masquerading under the guise of “CeDeFi”.

In addition to the billions of dollars that the Celsius management already lost for their customers, the complaint would go after many of the personal assets of the top executives in order to bring these funds back to creditors.

There are many aspects to this, not least of which the $2.8m that was transferred from Celsius to Mashinsky’s personal wallet in May of 2022, which is deemed to be a direct violation of the US bankruptcy code.

In addition to this, the filing also stipulates that $12m transferred to AM Ventures and $5m transferred to Koala LLP (two companies that were both owned and controlled by Mashinsky) were also illegal transfers.

One of the accusations the Celsius team is currently dealing with is that clients’ bitcoin was used to purchase CEL from exchanges to drive the price above $2. This was a crucial level because it allowed insiders to sell their holdings, as outlined in their earlier fundraising rounds.

What does this mean for Celsius creditors?

The court filing has given some optimism to Celsius creditors that Mashinsky will be forced to forfeit more personal assets to the US bankruptcy court, but there is still a huge hole in the balance sheet that hasn’t yet been filled – and is unlikely to ever be filled.

Creditors will still have to wait a considerably long time for the debacle to fully unfold, but it does seem as though some semblance of justice is returning in that Mashinsky himself may be forced to now forfeit personal assets.

Relevant news:

Wall Street Memes (WSM) - Newest Meme Coin

Our Rating

Wall Street Memes
  • Community of 1 Million Followers
  • Experienced NFT Project Founders
  • Listed On OKX
  • Staking Rewards
Wall Street Memes
Visit OKX