Alex Mashinsky, the founder and former CEO of crypto lender Celsius, has filed a motion in court seeking the dismissal of the Federal Trade Commission (FTC) case against him "in its entirety." Mashinsky's legal team argued that the allegations against their client do not meet the standards for a claim under the Gramm-Leach-Bliley Act (GLBA), stating that there is no evidence of knowingly making false claims to fraudulently obtain customer information from a financial institution.
Resignation from Celsius as a defense
The lawyers representing Mashinsky also claimed that his resignation from Celsius on September 27, 2023, means that the complaint cannot prove that he "is violating" or "is about to violate" the law. The FTC had previously issued a $4.7 billion fine against bankrupt crypto lender Celsius Network in July and filed a lawsuit against Mashinsky, as well as Celsius' co-founders Shlomi Daniel Leon and Hanoch "Nuke" Goldstein.
Dispute over Goldstein's involvement
Mashinsky's legal team, which was also representing Goldstein, argued that the FTC seems to be basing its case against Goldstein solely on the fact that he retweeted a blog post by Celsius. According to Goldstein, this behavior is being misconstrued as a sign of complicity or participation in the alleged misconduct.
The downfall of Celsius
Celsius was one of the largest crypto-lending platforms led by Mashinsky before its collapse in 2022. Mashinsky resigned as CEO in September of the same year, and by the end of 2022, he was indicted by the United States Justice Department on multiple charges of criminal fraud. Mashinsky has pleaded not guilty to these charges and was released on a $40 million bond.
