The former chief executive of bankrupt crypto lending company Celsius has asked a US court to dismiss the Federal Trade Commission’s (FTC) charges against him.
Alex Mashinsky and Celsius’ former chief revenue officer Roni Cohen-Pavon were arrested in July.
The former executives were slapped with a variety of criminal and civil charges from the FTC, the Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).
The FTC specifically accused the former CEO of “tricking consumers into transferring cryptocurrency onto the platform by falsely promising that deposits would be safe and always available.”
Mashinsky and Cohen-Pavon are also accused of manipulating the price of Celsius’ native token, CEL, which in turn caused traders to purchase it at an inflated price, a move that financially benefited the defendants.
Celsius, which promised high yields to customers for depositing their coins, froze customer withdrawals in June of 2022, citing extreme market conditions. It filed for bankruptcy the following month.
Argue Mashinsky’s lawyers in a recent memorandum supporting his motion to dismiss the FTC charges,
“The allegations do not support a claim that Mashinsky made knowingly made a misstatement to fraudulently obtain customer information from a financial institution, as required to state a claim under the [the Gramm-Leach-Bliley Act].”Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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