Weekend Wrap: Celsius’ Mashinsky fraud suit is on, Tether class suit dismissed and more
The former chief executive of crypto lending platform Celsius Network, Alex Mashinsky is back on track to face a civil fraud lawsuit after a Supreme Court judge denied his motion to dismiss the case.
A court order issued on Aug. 4 by New York County Supreme Court Justice Margaret Chan denied Mashinsky’s motion to dismiss the suit originally brought by New York Attorney General, Letitia James in January.
Celsius filed for Chapter 11 bankruptcy on July 14, 2022, and Mashinsky resigned as CEO in September of that year.
Mashinsky's response argued the complaint failed to state a "legally-cognizable" claim against Mashinsky and is otherwise deficient, among other arguments.
However, Judge Chan argued there were sufficient allegations to support a plausible inference that Mashinsky's misstatements induced new investors to deposit in Celsius' earn accounts.
The judge has denied the motion to dismiss and has also ordered Mashinsky to file an answer to the complaint within 30 days of the order.
The CFTC and SEC issued their own civil cases against Mashinsky in July amid the former CEO’s criminal charges. Moreover, the Federal Trade Commission (FTC) issued $4.7 billion in fines to Celsius for allegedly “squandering billions in user deposits” after “duping” users.
Stablecoin issuer Tether has lauded a legal victory after a U.S. District Court dismissed a class action lawsuit regarding its reserves on Aug. 4.
Judge Laura Taylor Swain of the U.S. District Court for the Southern District Of New York issued an order dismissing the class action lawsuit filed by Matthew Anderson and Shawn Dolifka in 2021.
The complaint claimed that the defendants did not maintain the same amount of reserves as Tether tokens in circulation.
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