Crypto Biz: Celsius, FTX feel investors’ wrath as lawsuits multiply
The stunning collapses of Celsius and FTX destroyed many lives — early adopters who had the foresight to understand the unique value propositions of Bitcoin (BTC) and crypto were left with practically nothing when both platforms halted withdrawals, shuttered their doors and eventually filed for bankruptcy. While there’s still hope that creditors will be made partially whole again, the road to recouping financial losses is expected to be long. While they’re waiting, creditors are banding together to sue these firms for various alleged infractions.
This week’s Crypto Biz delves into recent lawsuits targeting Celsius co-founder Alex Mashinsky and several venture capital firms that backed FTX during previous investment rounds. We also survey the latest news surrounding the United States Securities and Exchange Commission (SEC) and end on a positive note about a potential blockchain use case.
Once the darling of yield-seeking crypto investors, bankrupt lending platform Celsius is accused of “fraud, recklessness, gross mismanagement and self-interested conduct” by former customers. In a complaint filed in a bankruptcy court on Feb. 14, attorneys representing Celsius’ creditors proposed to sue co-founder Alex Mashinsky and other former executives for such misdeeds. “Mr. Mashinsky, Mr. Leon, Mr. Goldstein, Mr. Beaudry, Ms. Urata-Thompson, and Mr. Treutler breached their fiduciary obligations to Celsius,” the lawyers wrote about Celsius’ executives. “Those parties were aware Celsius was promising its customer’s interest payments that it could not afford and did nothing to fix the problem.” It looks like Mashinsky’s problems are only just getting started.
1-In connection with its investigation, the UCC has identified significant
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