Weekend Wrap: Celsius’ Mashinsky fraud suit is on, Tether class suit dismissed and more

Martin Young4 hours agoWeekend Wrap: Celsius’ Mashinsky fraud suit is on, Tether class suit dismissed and moreThe former Celsius CEO has been denied a lawsuit dismissal, Tether celebrates a minor court victory and China vows to crack down on telecoms fraud using crypto and AI.1752 Total views13 Total sharesListen to article 0:00RecapJoin us on social networksCelsius" Mashinsky motion to dismiss denied

The former chief executive of crypto lending platform Celsius Network, Alex Mashinsky, is back on track to face a civil fraud lawsuit after a New Yor judge denied his motion to dismiss the case.

A court order issued on Aug. 4 by New York County Supreme Court Justice Margaret Chan denied Mashinsky’s motion to dismiss the suit originally brought by New York Attorney General Letitia James in January.Screenshot from denial filing. New York v. Mashinsky, New York State Supreme Court. No. 450040/2023. Source: New York State Supreme Court

Celsius filed for Chapter 11 bankruptcy on July 14, 2022, and Mashinsky resigned as CEO in September of that year.

Mashinsky’s response argued the complaint failed to state a “legally-cognizable” claim against Mashinsky and is otherwise deficient, among other arguments. 

However, Judge Chan argued there were sufficient allegations to support a plausible inference that Mashinsky’s misstatements induced new investors to deposit in Celsius’ earn accounts. 

The judge has denied the motion to dismiss and has also ordered Mashinsky to file an answer to the complaint within 30 days of the order. 

The Commodity Futures Trading Commission and the Securities and Exchange Commission issued their own civil cases against Mashinsky in July amid the former CEO’s criminal charges. Moreover, the Federal Trade Commission issued $4.7 billion in fines to Celsius for allegedly “squandering billions in user deposits” after “duping” users.Judge dismisses Tether class action suit

Stablecoin issuer Tether has lauded a legal victory after a U.S. District Court dismissed a class action lawsuit regarding its reserves on Aug. 4.

Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York issued an order dismissing the class action lawsuit filed by Matthew Anderson and Shawn Dolifka in 2021.

The complaint claimed that the defendants did not maintain the same amount of reserves as Tether tokens in circulation.It's a good Friday.#Tether and @Bitfinex Win Comprehensive Legal Victory as U.S. District Court Dismisses Class Action Lawsuit

The Court correctly held that plaintiffs’ complaint lacked any “plausible allegations of injury” because it includes no facts showing that “USDT had a…— Paolo Ardoino (@paoloardoino) August 4, 2023

Reporting on the result, Tether stated “The dismissal of the entire class action at this very early stage of the proceedings underscores the fact that the plaintiffs’ claims lacked any legal merit.”

Tether Chief Technology Officer Paolo Ardoino called it a “good Friday.”China cracks down on telecom fraud, targeting crypto

The Chinese government has reportedly announced plans to crack down on overseas telecom fraud, and has pointed the finger directly at crypto and artificial intelligence.

On Aug. 6, local media reported that the Commission for Political and Legal Affairs of the Communist Party of China (CPC) Central Committee has issued the warning.crypto and AI fraudsters after China announced aggressive measures to tackle fraud pic.twitter.com/08aqR1HDkn— web3 guy (@memefloor) August 7, 2023

It specifically stated that it would be targeting new methods used by cyber criminals including blockchain, metaverse, cryptocurrencies, and artificial intelligence.

The announcement followed recent reports of Chinese nationals being subjected to telecoms fraud involving “virtual kidnapping.” Scammers have been impersonating public security personnel to dupe victims into divulging personal information which has led to extortion and ransoms.Worldcoin touts user growth

Weekly global World ID verifications more than doubled in the seven days following the launch of retina-scanning digital ID platform Worldcoin, according to an Aug. 6 announcement from the firm.

It added that there was a threefold increase in weekly active World App users and more than 10 times the weekly account creations in the seven days following the launch. Worldcoin claims to have over 2 million users.

“Last week"s 2X growth in weekly World ID sign-ups demonstrates a sustained increase in global demand for World ID as a standalone product,” it said.In the days following the Worldcoin launch, World App downloads hit record highs around the world. pic.twitter.com/K4iV6llPfR— Tools For Humanity (@tfh_technology) August 3, 2023

However, on Aug. 4 Cointelegraph reported that Worldcoin’s Orb had serious a security vulnerability in operator onboarding according to CertiK.Also making news

The Huobi crypto exchange has been reporting large outflows over the weekend amid ongoing concerns and rumors regarding its solvency. Additionally, Chinese authorities have been reportedly investigating its executives.

On Aug. 5, Elon Musk quashed rumors of a token launch for his recently rebranded micro-blogging platform X (formerly known as Twitter). The tech entrepreneur said there would never be a token launch despite unrelated altcoins being pumped and dumped by degens.

Magazine:Girl Gone Crypto thinks ‘BREAKING’ crypto news tweets are boring: Hall of Flame# China# Business# Worldcoin# Tether# Elon Musk# CelsiusAdd reactionAdd reactionRelated NewsWhat are NFT royalties, and how do they work?Worldcoin: Should you let Sam Altman scan your eyeballs for WLD?Ensuring integrity of blockchain transactions: Trust through auditsCrypto Biz: Winklevoss slams Silbert, Twitter’s double-edged sword and moreAgence France-Presse sues Elon Musk and X/Twitter over compensation for newsCrypto Biz: Worldcoin plans to open source data, MicroStrategy preps for BTC halving, and more