Celsius Creditors File Lawsuit Against Former Top Executives
Celsius Network is facing legal action from its creditors after they filed a lawsuit against several former executives of the platform in the United States Bankruptcy Court for the Southern District of New York. The lawsuit accuses the executives, along with some of their spouses, of “fraud, recklessness, gross mismanagement, and self-interested conduct.”
#Celsius creditors sue Mashinsky and former top execs. for millions 🧑⚖️
Full story 🔽🔽https://t.co/9KySzlzUAf
— CryptoSavingExpert ® (@CryptoSavingExp) February 15, 2023
The executives named in the lawsuit include co-founder, director, and former CEO, Alex Mashinsky, co-founder, director, former Chief Strategy Officer and COO, Shlomi Daniel Leon, co-founder, and former CTO, Hanoch ‘Nuke’ Goldstein, former CFO, and Chief Investment Officer, Harumi Urata-Thompson, former General Counsel and Chief Compliance Officer, Jeremie Beaudry, and former head of Celsius’ trading desk, Johannes Treutler.
Celsius Creditors’ Allegations
The creditors claim that the defendants inflated the price of Celsius’ CEL tokens by spending hundreds of millions of dollars of user funds for their direct benefit. They then sold tens of millions of CEL tokens secretly, directing Celsius to purchase them on public markets. Furthermore, the defendants withdrew assets from the platform before Celsius halted withdrawals while actively encouraging customers to keep their assets on the Celsius platform.
Creditors Seek Return of Millions Amid Lawsuit
Celsius Network and its creditors are now seeking the return of millions of dollars moved by the defendants before the platform halted withdrawals. The court filing added that “the complaint would bring claims and causes of action against the prospective defendants to return millions of dollars removed from the Celsius platform in the months prior to the pause and recover damages from billions of dollars that were lost by the prospective defendants’ negligent, reckless, and self-interested conduct.”
The legal action taken by Celsius Network’s creditors comes after the platform filed for bankruptcy in December 2021. Celsius Network had been one of the fastest-growing companies in the crypto space, with its user base growing rapidly in the months leading up to its bankruptcy. However, the platform faced liquidity issues and halted withdrawals in November 2021, leading to the filing for bankruptcy. The legal action taken by Celsius Network’s creditors may serve as a cautionary tale for other crypto platforms, highlighting the importance of proper management and risk mitigation.