Celsius Network’s lawyers said the claims under the Federal Trade Commission (FTC) Act and the Graham-Leach-Bailey Act, which regulates the secure handling of non-public personal information (including financial records), should be dismissed. The commission’s complaint does not identify specific violations of laws that Celsius may have committed.
Lawyers argue: the FTC cannot demand monetary compensation from Mashinsky. And the department was unable to prove that the defendant knowingly made false statements in order to fraudulently obtain information about clients.
The FTC sued lending service Celsius after it ran into financial difficulties during the cryptocurrency market downturn last year. In July, the US Department of Justice issued an arrest warrant for Alex Mashinsky as part of a coordinated effort between the FTC and the US Commodity Futures Trading Commission (CFTC).
In the Mashinsky case, no evidence was presented that the defendant is violating or is on the verge of violating the law, since he resigned from the position of CEO on September 27, 2022. Previously, Mashinsky’s lawyers declared his innocence on charges of fraud and manipulation of CEL tokens. Mashinsky himself said that the FTC should establish clearer rules before accusing participants in the crypto industry of defrauding investors or committing fraud.
In May, Alex Mashinsky sent a petition to the court to dismiss the claim of the New York Attorney General’s Office, which accused the entrepreneur of fraud. He explained that the bankruptcy of the crypto lender was due to external circumstances that Mashinsky could not control.
Source: Bits
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