The former CEO of the bankrupt crypto credit company Celsius has asked a US court to dismiss the Federal Trade Commission (FTC) charges against him.
Alex Mashinsky and former Celsius Chief Revenue Officer Roni Cohen-Pavon were arrested in July.
The former executives faced a variety of criminal and civil charges from the FTC, the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodities Futures Trading Commission (CFTC).
The FTC specifically accused the former CEO of “tricking consumers into transferring cryptocurrency to the platform by falsely promising that deposits would be secure and always available.”
Mashinsky and Cohen-Pavon are also accused of manipulating the price of Celsius’ native token, CEL, which in turn led to traders buying it at a high price, a move that benefited the defendants financially.
Celsius, which promised high returns to customers for depositing their coins, froze customer withdrawals in June 2022, citing extreme market conditions. The bankruptcy was filed the following month.
In a recent memorandum supporting his motion to dismiss the FTC’s complaint, Mashinsky’s lawyers claim:
“The allegations do not support the allegation that Mashinsky knowingly made misrepresentations to fraudulently obtain customer information from a financial institution as required to make a claim under the law.” [the Gramm-Leach-Bliley Act].”
A recently made public court order indicates that several bank accounts and a Texas home belonging to Mashinksy have been seized by the DOJ.
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