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Alex Mashinsky, the founder and former CEO of the now-defunct crypto lender Celsius, has submitted a new motion in court requesting the dismissal of the case brought against him by the United States Federal Trade Commission “in its entirety.”
The legal representatives for the ex-Celsius leader contended that the accusations against their client do not substantiate the assertion that he intentionally made a false statement to “fraudulently acquire customer information from a financial institution.” The attorneys argued that the claims do not fulfill the criteria for a case under the Gramm-Leach-Bliley Act, a law enacted in 1999 that mandates knowingly making false statements to unlawfully gather customer information from a financial institution.
Furthermore, the attorneys asserted that since Mashinsky stepped down from his role as CEO of Celsius on September 27, 2023, the complaint fails to demonstrate that he “is violating” or “is about to violate” the law.
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The FTC imposed a $4.7 billion penalty against the bankrupt crypto lender Celsius Network in July and initiated a lawsuit against the Celsius founder along with co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein. Mashinsky’s legal team is also representing Goldstein.
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His attorneys claimed that the FTC appears to be constructing its case against Goldstein solely based on his retweet of a blog post by Celsius. Goldstein stated that this action is being misinterpreted as an indication of complicity or involvement in the alleged wrongdoing.
Celsius was among the largest crypto-lending platforms, led by Mashinsky, prior to its collapse in 2022. The founder resigned as CEO in September of the same year, and by the end of 2022, the United States Justice Department had charged the former CEO with multiple counts of criminal fraud. Mashinsky has pleaded not guilty to the various charges against him and is currently out on bail with a $40 million bond.
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