Alex Mashinsky, founder and former CEO of now-bankrupt crypto lender Celsius, filed a new motion in court seeking the dismissal of the United States Federal Trade Commission case against him “in its entirety.”

The legal counsel for the former Celsius boss argued that the allegations against their client do not support the claim that he knowingly made a misstatement to “fraudulently obtain customer information from a financial institution.” According to the lawyers, the accusations do not meet the standards for a claim under the Gramm-Leach-Bliley Act. This 1999 law requires knowingly making false claims to collect customer information fraudulently from a financial institution.

Additionally, the lawyers claimed that because Mashinsky resigned from his position as CEO of Celsius on Sept. 27, 2022, the complaint cannot prove that he “is violating” or “is about to violate” the law.

The FTC issued a $4.7-billion fine against bankrupt crypto lender Celsius Network in July and filed a lawsuit against the Celsius founder along with Celsius’ co-founders, Shlomi Daniel Leon and Hanoch “Nuke” Goldstein. 

oldstein's lawyers claimed that the FTC seems to be basing its case against Goldstein solely on the fact that he retweeted a blog post by Celsius. According to Goldstein, this behavior is being misconstrued as a sign of complicity or participation in the alleged misconduct.

Celsius was one of the largest crypto-lending platforms, headed by Mashinsky, before it imploded in 2022. The founder resigned as CEO in September later the same year, and by the end of 2022, the United States Justice Department had indicted the former CEO on multiple charges of criminal fraud. Mashinsky has pleaded not guilty to multiple charges filed against him and is out on bail on a $40-million bond.