In a fresh development surrounding the now-defunct lending giant, Celsius, its former CEO, Alex Mashinsky, is reportedly seeking a motion to altogether dismiss the Federal Trade Commission (FTC) case against him. Representing him, his legal counsel has vigorously argued that the allegations do not prove Mashinsky’s intention of fraudulently obtaining sensitive customer data. What’s impeding this case, they claim, are the standard requirements of the Gramm-Leach-Bliley Act (GLBA) – a 1999 law that outlaws making false claims to secure information from financial institutions unknowingly.
The primary bone of contention in the legal argument is that Mashinsky had already resigned from his role in Celsius by September 27, 2023 – implying that he cannot violate that law. The FTC, counteracting this, had incriminated Celsius with a whopping $4.7-billion fine following its bankruptcy before also filing a lawsuit against Mashinsky, co-founders Shlomi Daniel Leon, and Hanoch “Nuke” Goldstein.
As the second critical player in this scandalous saga, Hanoch Goldstein is represented by Mashinsky’s legal team, who also argued that Goldstein’s retweeting a Celsius blog post cannot constitute complicity in the alleged misconduct.
Celsius had soared to become one of the most significant crypto-lending platforms under Mashinsky’s leadership. However, it suffered a dramatic downfall leading to Mashinsky’s resignation and by the end of 2022, the US Justice Department had indicted the former CEO on multiple counts of criminal fraud.
Mashinsky, maintaining his innocence, is now out on bail, secured against a hefty $40 million bond. While he fights to vindicate himself, for the FTC, the challenge is to answer the potent legal questions raised by Mashinsky’s defense. The future of these legal proceedings will undoubtedly set a precedent for crypto-lending and pose crucial questions on regulatory oversight and accountability in an increasingly digitised financial environment.
Source: Cointelegraph
