Alex Mashinsky, the founder and former Chief Executive Officer of cryptocurrency lender Celsius, has asked the Federal Trade Commission (FTC) to drop its case against him, a court filing on Monday said.
Celsius filed for bankruptcy last year during the cryptocurrency market downturn, and in July, Mashinsky was arrested as a result of coordinated efforts by the consumer protection body, the Department of Justice, and securities and commodities regulators.
Mashinsky has previously entered a plea of not guilty to multiple charges related to fraud and price manipulation of the CEL token, with his legal team describing these charges as “baseless.” Now, they are arguing that the court should also dismiss the FTC’s claims that Mashinsky deceived investors.
In the Monday filing, Mashinsky’s lawyers contended that the allegations do not substantiate a claim that Mashinsky knowingly made false statements to fraudulently acquire customer information from a financial institution, as required by the Gramm-Leach-Bliley Act of 1999.
Alongside his former Chief Technology Officer, Hanoch “Nuke” Goldstein, Mashinsky argued that the FTC should establish clearer guidelines before pursuing cases involving novel issues like marketing fraud. In a separate filing, Goldstein maintained that he was unjustly implicated due to his association with other Celsius executives, with the FTC’s case relying on the fact that he retweeted a Celsius blog.
Simultaneously, U.S. Attorney Damian Williams requested the court to temporarily suspend FTC proceedings to prevent any potential biasing of the parallel criminal case.
Mashinsky resigned as CEO in September 2022 after Celsius filed for bankruptcy in July of the same year. He was released on a $40 million bond, and a recent court ruling froze his banking and real estate assets.
