Former Celsius CEO Alex Mashinsky moves to dismiss FTC lawsuit

Quick Take

The former Celsius CEO wants the FTC charges dismissed in part because of the timing when he resigned.

Former Celsius CEO Alex Mashinsky is asking a New York district court to dismiss the Federal Trade Commission's case against him.

The former executive says the case should be dismissed in part because the agency could not "substantiate a claim that Mashinsky 'is violating' or is 'about to violate' the law because Mashinsky resigned from his position as CEO of Celsius in September 27, 2023," lawyers for Mashinsky said in a court filing on Monday.

The FTC charged Celsius, Mashinsky and other co-founders including Shlomi Daniel Leon and Hanoch "Nuke" Goldstein in July for an array of charges including duping consumers into transferring crypto onto their platform by falsely promising that their deposits would be safe.

Goldstein is also asking for the FTC charges to be dismissed.

Celsius settled with the FTC in July for $4.7 billion, though because of the company's ongoing bankruptcy, the FTC agreed to suspend the payment to allow Celsius to maximize return of its remaining assets to customers.

Ire from multiple regulators

Mashinsky was arrested in July after prosecutors said he defrauded customers and misled them about the crypto lender's profitability. He pleaded not guilty to those criminal charges.

Celsius filed for bankruptcy last year and owes billions of dollars to investors, having caught the ire of two other regulators. In July, the Securities and Exchange Commission sued the crypto lender and Mashinsky for allegedly raising billions through fraudulent and unregistered sales of "crypto asset securities," repeatedly lying to investors about Celsius' financial standing, and manipulating the price of CEL, the company's native token.

The Commodity Futures Trading Commission also filed its own fraud charges against Mashinsky and Celsius.