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☆ Crypto firms off to rocky start in 2023 with outflows, layoffs and a lawsuit
▼ + stars: | 2023-01-05 | by ( Hannah Lang | ) www.reuters.com time to read: +4 min

The fallout from the collapse of crypto exchange FTX and criminal charges leveled against its founder Sam Bankman-Fried weighed heavily on the sector this week. Among those hit were Genesis Global Capital, which laid off staff, and crypto-focused Silvergate Bank, which reported a large fall in deposits. Another crypto entrepreneur, Alex Mashinsky, the founder and former CEO of Celsius Network, also encountered a legal battle on Thursday. The accounts at Silvergate Bank and Farmington State Bank, which does business as Moonstone Bank, held about $143 million, court records showed. Crypto exchange Gemini, which had a crypto lending product in partnership with Genesis, and other Genesis creditors have been agitating for a solution to avoid a situation similar to FTX’s rapid descent into bankruptcy.

☆ Celsius Co-Founder Sued by New York Attorney General
▼ + stars: | 2023-01-05 | by ( Corinne Ramey | James Fanelli | ) www.wsj.com time to read: 1 min

New York Attorney General Letitia James filed a civil lawsuit Thursday against Alex Mashinsky, alleging the co-founder of bankrupt crypto lender Celsius Network LLC defrauded investors out of billions of dollars of digital currency. The lawsuit alleges that the former chief executive made false statements to investors about the soundness of Celsius’s financial condition then concealed its dire situation when the lender lost hundreds of millions of dollars in risky investments. Mr. Mashinsky falsely claimed that Celsius was safer than a bank and only lent assets to credible entities, the lawsuit said.

☆ New York sues Celsius Network founder Mashinsky, alleges fraud
▼ + stars: | 2023-01-05 | by ( ) www.reuters.com time to read: +2 min

Companies Celsius Network Limited FollowNEW YORK, Jan 5 (Reuters) - New York's attorney general on Thursday sued Celsius Network founder Alex Mashinsky, claiming he schemed to defraud hundreds of thousands of investors by inducing them to deposit billions of dollars with his now-bankrupt cryptocurrency lending platform. "Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin," James said in a statement. The civil lawsuit accuses Mashinsky of violating the state's Martin Act, which gives James broad power to pursue securities fraud cases, and other laws. It seeks to ban Mashinsky from doing business in New York, and have him pay damages, restitution and disgorgement. But according to the lawsuit, Celsius struggled to pay the promised yields on investor deposits, prompting its move into riskier investments.

Jan 5 (Reuters) - Alex Mashinsky, a co-founder of bankrupt crypto lender Celsius Network who prosecutors allege bilked investors out of billions, is a serial entrepreneur who has portrayed himself as a modern-day Robin Hood. The civil lawsuit seeks to ban Mashinsky from doing business in New York and have him pay damages, restitution and disgorgement. James' lawsuit is the latest black eye for the crypto sector, which has been rocked by accusations against FTX crypto exchange founder Sam Bankman-Fried. Mashinsky became involved in crypto in 2017, when his venture fund Governing Dynamics brought on blockchain company MicroMoney as a strategic partner. In an "Ask Mashinsky Anything" YouTube video on June 10, the entrepreneur said "Celsius has billions in liquidity."

☆ New York AG accuses Celsius ex-CEO of defrauding crypto investors
▼ + stars: | 2023-01-05 | by ( Rohan Goswami | ) www.cnbc.com time to read: +3 min

New York Attorney General Letitia James sued former Celsius Network CEO Alex Mashinsky on Thursday, alleging that Mashinsky defrauded hundreds of thousands of investors at his now-bankrupt crypto exchange. At one point, deposits at the crypto exchange were valued at $20 billion, according to the complaint. But Mashinsky's statements were false, James alleges, and became part of the former Celsius CEO's efforts to hide deep losses on risky crypto-lending investments. Celsius investors were left bereft and so despondent that some considered suicide, CNBC previously reported. Celsius entered bankruptcy proceedings with only $1.75 billion in crypto assets, a far cry from the $4.7 billion it owed users.

☆ Bankrupt cryptocurrency lender Celsius Networks allegedly defrauded investors out of billions of dollars
▼ + stars: | 2023-01-05 | by ( Kara Scannell | ) edition.cnn.com time to read: +2 min

New York CNN —The New York attorney general filed a civil lawsuit Thursday against the co-founder of now-bankrupt cryptocurrency lender Celsius Networks for allegedly defrauding hundreds of thousands of investors who deposited billions of dollars into the platform. The lawsuit against Alex Mashinsky alleges he made false and misleading statements to encourage investors to place billions of dollars in digital assets with Celsius, which filed for bankruptcy court protection last year. “The law is clear that making false and unsubstantiated promises and misleading investors is illegal,” James said in a statement Thursday. When faced with losses, the lawsuit alleges, Mashinsky hid them from investors and continued to tout the safety of the platform to recruit new investors. In extending many of the loans, Celsius accepted FTX’s token, FTT, as collateral.

☆ Factbox: From BlockFi to Genesis, crypto firms reel from exposure to FTX
▼ + stars: | 2023-01-05 | by ( ) www.reuters.com time to read: +5 min

Jan 5 (Reuters) - After the collapse of major cryptocurrency exchange FTX, the industry has felt a ripple effect due to the exposure of many companies to FTX and its affiliated trading firm Alameda Research. Here are some firms that have given information about their exposure to FTX. The crypto lending arm of U.S. digital asset broker Genesis Trading suspended customer redemptions last month, citing the sudden failure of FTX. Genesis said in a tweet on Nov. 10 that its derivatives business has approximately $175 million in locked funds on FTX. COINSHARESCrypto asset manager CoinShares has $30.3 million worth of exposure to crypto exchange FTX, it said in a statement on Nov. 10.

If Celsius deposits are determined to belong to customers, users are far more likely to get their assets returned. Crypto companies typically offer a variety of accounts and they will likely be treated differently in bankruptcy. BlockFi, which is at the beginning of its own bankruptcy case, also offers both interest-bearing and custody accounts. 'WORSE THAN BANKS'Courts will also have to look beyond the user agreements and examine how crypto companies actually handled the deposits, according to bankruptcy specialists. “This is going to have enormous influence on crypto companies and crypto customer behavior."

Knitowski borrowed $375,000 from crypto lender Celsius over several years and posted $1.5 million in bitcoin as collateral. Knitowski and thousands of other loan holders had more than $812 million in collateral locked on the platform, and bankruptcy records show Celsius failed to return collateral to borrowers even after they repaid their loans. Adler said he's representing a group of 75 borrowers who have approximately $100 million in digital assets on Celsius' platform. In the crypto world, a borrower can ask for a loan and pledge bitcoin as collateral. The crypto platform also failed to provide borrowers with a complete federal Truth in Lending Act (TILA) disclosure, according to former employees and an email sent to customers on July 4.

related investing news Cathie Wood's ARK Invest keeps buying more crypto assets despite FTX bankruptcy Crypto.com is smaller than FTX but still ranks among the top 15 global exchanges, according to CoinGecko. Kris Marszalek, CEO of Crypto.com, speaking at a 2018 Bloomberg event in Hong Kong, China. Marszalek has spent the early part of the week trying to reassure users and regulators that the business is fine. FTX CEO Sam Bankman-Fried said his company's assets were "fine" two days before he was desperate for a rescue because of a liquidity crunch. Marszalek said on Monday that this was just a reflection of the assets Crypto.com customers were buying.

☆ Opinion: No one is coming to save the crypto industry
▼ + stars: | 2022-11-12 | by ( Emily Parker | ) edition.cnn.com time to read: +6 min

Sam Bankman-Fried, the 30-year-old CEO of crypto exchange FTX, helped bail out distressed crypto companies like BlockFi and Voyager. In an industry with a reputation that has been marred by scammers, hackers and sheer greed, Bankman-Fried seemed like a relatively nice guy. The whole point of crypto is that it is supposed to be decentralized and transparent. Changpeng Zhao, CEO of the world’s biggest crypto exchange Binance, publicly announced that the exchange would liquidate its FTX holdings. Join us on Twitter and FacebookFor the crypto industry, the lesson here is to stop looking for saviors.

☆ JPMorgan Hires Crypto Policy Head From Celsius Network
▼ + stars: | 2022-10-19 | by ( Mengqi Sun | ) www.wsj.com time to read: +3 min

JPMorgan Chase & Co., whose chief executive recently expressed skepticism of cryptocurrency, has hired a crypto policy head from bankrupt cryptocurrency lender Celsius Network LLC. Aaron Iovine has joined the bank as executive director of digital assets regulatory policy, a spokeswoman for JPMorgan said on Wednesday. Mr. Iovine served as head of policy and regulatory affairs at Celsius between February and September of this year. Mr. Iovine was its head of policy and regulatory affairs when he left the bank. Bloomberg Law first reported the hire Wednesday, saying Mr. Iovine joined JPMorgan this week.

☆ Before Crypto Lender Celsius Crashed, CEO Alex Mashinsky Was Known for Big Ideas and Battles
▼ + stars: | 2022-09-28 | by ( James Fanelli | Vicky Ge Huang | ) www.wsj.com time to read: 1 min

For some 30 years, Alex Mashinsky barreled into whatever was the hot technology of the time, promising revolutions in long-distance calling, airport rides and, most recently, crypto. He often left a trail of unhappy friends, colleagues and investors. His latest venture, Celsius Network LLC, pitched itself as both safe and subversive. It was a way for regular people to tap the moneymaking potential of crypto, and to upend traditional banking. Last month, Celsius filed for bankruptcy protection, and its customers worry they might never get their money back.

☆ Celsius CEO Alex Mashinsky Steps Down
▼ + stars: | 2022-09-27 | by ( Vicky Ge Huang | ) www.wsj.com time to read: 1 min

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Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCelsius CEO Alex Mashinsky resigns, and FTX buys Voyager's assets for $1.4 billion: CNBC Crypto WorldCNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what's ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today's show, Jesse Proudman, vice president of crypto trading at Betterment, discusses a new partnership with Gemini and the state of retail crypto investors.

☆ Celsius CEO resigns in the middle of bankruptcy proceedings
▼ + stars: | 2022-09-27 | by ( Ashley Capoot | ) www.cnbc.com time to read: +1 min

Alex Mashinsky, founder and chief executive officer of Celcius Network Ltd., during a panel session at the Blockchain Week Summit in Paris, France, April 13, 2022. Celsius Network CEO Alex Mashinsky submitted a letter of resignation Tuesday, months after the crypto company filed for Chapter 11 bankruptcy protection. Mashinsky's resignation is effective immediately, but he said in a release that he will continue to help the company provide creditors with the "best outcome." As of May, Celsius was one of the largest players in the crypto lending space with more than $8 billion in loans to clients and almost $12 billion in assets under management. The firm would lend customers' crypto out to counterparties willing to pay sky-high interest rates to borrow it, and Celsius would then split some of that revenue with users.

REUTERS/Dado Ruvic/IllustrationSept 27 (Reuters) - Celsius Network said on Tuesday Chief Executive Officer Alex Mashinsky has decided to step down and the bankrupt crypto lender appointed finance chief Chris Ferraro as its interim CEO. Before Celsius, Ferraro spent nearly 18 years at JPMorgan Chase & Co (JPM.N). Celsius also said Ferraro would serve as the company's chief restructuring officer. Last month, Celsius sued a former investment manager, accusing him of losing or stealing tens of millions of dollars in assets before the crypto lender went bankrupt. Rival crypto lender Voyager Digital, which also filed for bankruptcy in July, said on Monday that crypto exchange FTX won a $1.42 billion bid to acquire its assets at an auction.

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