The statement stated that the former CEO should return funds that he moved prior to the lender filing for bankruptcy in July.
Celsius and its creditors have filed suit in an effort to recoup funds they believe were unlawfully transferred by the company’s former CEO Alex Mashinsky, Mashinsky’s wife, and other former executives.
The crypto lender went bankrupt in July of last year, and according to court documents published on Tuesday, defendants Mashinsky, co-founder S. Daniel Leon, and others mismanaged the company, artificially inflated the price of CEL tokens for their own gain, and made “negligent, reckless, and sometimes self-interested investments.”
The filing states that it “seeks to recover damages from billions of dollars that were lost by the Prospective Defendants’ negligent, reckless, and self-interested conduct” and that it “would bring claims and causes of action against the Prospective Defendants to return millions of dollars removed from the Celsius platform” in the months before it froze withdrawals.
With their 150-page complaint, they’re asking the court for money back plus fees and penalties for 33 separate offenses. The petition claims that Celsius lost almost $200 million due to Mashinsky’s decision to transfer billions to the decentralized financial platform KeyFi, which he co-owned, for speculative investment.
The letter claims that in May of 2022, Mashinsky sent $2.8 million to his personal wallet, which is a suspicious payment because it was done within two years of the firm filing for bankruptcy in the United States. In addition, the document alludes to the $12 million that the firm paid over to Mashinsky’s AM Ventures and the $5 million that went to Koala LLP, all of which are controlled by Mashinsky.
,Mashinsky’s LinkedIn message seeking reaction from CoinDesk has gone unanswered.
