On January 5, New York Attorney General Letitia James sued Celsius founder and former CEO Alex Mashinsky for making repeated misrepresentations about the company’s financial products and asset holdings to investors. AG James describes the now bankrupt crypto-lending platform Celsius as “a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for promises of high yields on those digital assets.”

In her complaint, AG James alleges that as Celsius’ founder and CEO, Mashinsky “promised investors high yields with minimal risk” and assured customers in interviews, on social media, and in advertisements that investments with the platform were “as safe as depositing money in a bank.” Contrary to Mashinsky’s statements, however, Celsius allegedly “engaged in risky investment strategies” and concealed its exposure to risky investment strategies” from investors despite “repeated promises of transparency.”

AG James also alleges that in May 2022, as cryptocurrency markets plummeted, Mashinsky continued to mislead investors, asserting Celsius’ investments were “strong as ever.” In reality, Celsius was allegedly insolvent and lacked the liquidity to satisfy growing customer withdrawals. Ultimately, Celsius suspended withdrawals from its platform on June 12 and declared bankruptcy a month later.

The complaint alleges Mashinsky’s fraudulent or illegal conduct violated New York General Business and Executive Laws and seeks to permanently bar Mashinsky from doing business in New York, secure disgorgement of any proceeds, and obtain damages and restitution.

Why This Matters

AG James’ suit demonstrates how corporate executives perceived to be personally engaged in illegal conduct could be exposed to suits from state AGs. Troutman Pepper will continue to monitor such suits, while providing updates on their success.


Troutman Pepper State Attorneys General Team

























































Ashley Taylor – Co-leader and Firm Vice Chair

Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
Clay Friedman – Co-leader

Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
Stephen Piepgrass

Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
Michael Yaghi

Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
Avi Schick

A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
Ketan Bhirud

As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
Natalia Jacobo

Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
Namrata Kang

Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
Susan Nikdel

Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.
Whitney Shephard

Whitney is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
Trey Smith

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement practice. His experience includes serving as a summer associate at the firm in 2021.
Daniel Waltz

An experienced litigator, Daniel advises and represents regional, national and international companies, financial institutions and insurers in all facets of business, complex commercial and insurance coverage litigation. He is committed to working with his clients to find creative solutions to meet their needs.
Stephanie Kozol

Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.



Troutman Pepper Consumer Financial Services Team


























Stefanie Jackman

Stefanie takes a holistic approach to working with clients both through compliance counseling and assessment relating to consumer products and services, as well as serving as a zealous advocate in government inquiries, investigations, and consumer litigation.





Chris Carlson


Chris represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
Caleb Rosenberg

Caleb is an associate in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small businesses in the credit and alternative finance products industry.