The proposed lawsuit names Alex Mashinsky and several former executives and co-founders for alleged “recklessness, gross mismanagement, and self-interested conduct.”
The staff committee of Celsius’ of the payers recommended firing the employee of the Celsius department Alex Mashinsky and other directors of the company for “fraudulence, recklessness, big management and selfish behavior” of eventually led to the collapse of the crypto lender.
In a proposed case filed in bankruptcy court in New York on Feb. 14, lawyers representing the committee of unsecured creditors said that this decision followed a six-month investigation with current and former directors, employees, and employees of Celsius.
The committee is made up of seven Celsius account holders and was appointed by the US administration in July. This committee represents the interests of Celsius account holders and unsecured creditors.
“The committee’s investigation revealed serious allegations and causes of action based on fraud, embezzlement, gross negligence, and self-serving behavior by former directors and officers of the debtors,” said White’s attorneys. & Case LLC. The proposed lawsuit – which seeks damages in the amount to be proven at trial – seeks to bring actions and causes of action against Celsius employees, individuals, and companies affected by them:
“Mr. Mashinsky, Mr. Leon, Mr. Goldstein, Mr. Beaudry, Ms. Urata-Thompson and Mr. Treutler breached their fiduciary duties to Celsius,” the lawyers wrote, adding:
“This group knows that Celsius is promising its customers’ interest payments that it can’t do and has done nothing to resolve the issue.”
Prosecutors alleged that investment managers’ “negligence, negligence (and sometimes selfishness”) caused Celsius to lose $1bn a year, while poor management led the way. Another quarter of a billion dollars “because they may not be well informed about the assets and the debt of the company.
“After this loss, they did not invest or create a corporate structure to properly address the issue, resulting in another loss,” they alleged.
The complaint also alleges that CEOs ordered Celsius to spend “hundreds of millions of dollars” in public markets to bid up CEL’s brand value, while they “secretly sold tens of millions of CELs.” tokens (or know these markets)” for them. “They sat by as Mr. Mashinsky recklessly bet hundreds of millions of dollars on the movements of the cryptocurrency market. They covered up Mashinsky’s repeated lies about investing in Celsius’ currency position.
“Finally, when it became clear that Celsius would need to file for bankruptcy, it would be the defendants who removed the assets from the sinking ship […] when they encourage customers to keep their assets on the Celsius platform. “, added the lawyers. . Celsius’ auditors’ committee said the proposed complaint was only “the first of many steps” in its investigation into alleged misconduct by Celsius executives and the return of assets to victims.
A hearing on the appeal will be held on March 8. Cointelegraph contacted Celsius for comment but did not immediately receive a response.
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