The motion to dismiss the FTC's lawsuit opens the doors for yet another chapter in Alex Mashinsky's legal story.
Alex Mashinsky, who once led the now-insolvent cryptocurrency lending platform Celsius, has officially filed a motion to dismiss the entire case that the Federal Trade Commission (FTC) has brought against him.
The former head of Celsius is facing charges from the FTC that accuse him of knowingly making false statements to "fraudulently obtain customer information from a financial institution."
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Mashinsky's legal team, which also represents co-founder Hanoch "Nuke" Goldstein, contends that the charges against him do not meet the criteria outlined in the Gramm-Leach-Bliley Act (GLBA) of 1999. The act mandates that one must knowingly make deceptive statements to collect customer data from a financial institution.
The attorneys argued that the FTC's case holds no water because Mashinsky stepped down from his CEO role on September 27th, 2022. They assert that it is implausible to claim that he is currently or imminently violating the law.
This case follows a $4.7-billion fine levied against the Celsius Network in July. In addition to Mashinsky, the FTC lawsuit also named co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein.
Legal representatives for Goldstein argue that the FTC is improperly basing its case on the fact that he merely retweeted a Celsius blog post. Goldstein contends that this action was misinterpreted as active involvement in the alleged illegal activities.
Before its downfall in 2022, Celsius had been one of the prominent platforms in the crypto-lending sector under Mashinsky's leadership. After resigning in September of the same year, the United States Justice Department indicted him on multiple counts of criminal fraud. Mashinsky, who is currently out on a $40 million bond, has entered a plea of not guilty to all charges.
As Alex Mashinsky fights to dismiss the FTC case, the intricacies of the allegations against him and his co-founders come under scrutiny. The motion to dismiss, grounded in the argument that the charges fail to meet the legal benchmarks of the Gramm-Leach-Bliley Act, will be a significant turning point in this high-stakes legal battle. With Mashinsky already facing a myriad of charges, the upcoming court decision will be keenly watched by the crypto community.
