The official committee of Celsius creditors recommended a lawsuit against Celsius founder Alex Maxine Leoni and other executives, accusing them of "fraud, recklessness, serious mismanagement and self-serving personal conduct", which in turn led to the bankruptcy of the login password loan company.

In a proposed lawsuit filed in New York City bankruptcy Court on Feb. 14, lawyers representing the unsecured creditors' official website committee said the move was made after six months of research into current and former executive directors, executives and employees of its Celsius.

The committee is made up of seven ℃ account holders and was appointed by a US trustee in July. The committee represents the interests of Celsius account holders and their unsecured creditors.

Lawyer White&Case LLC, a law firm, wrote: "the committee's investigation revealed important claims and prosecutions based on fraud, recklessness, serious mismanagement and self-interest of the borrower's former executive directors and executives."

The proposed lawsuit aims to clarify the reasons for the settlement and prosecution of the following senior executives, themselves, and related entities:

• Alex Maxine Leoni, founder, Executive Director and former CEO
• Toni Leon, founder, Executive Director, former CSO and Chief Strategy Officer
• Hanoch "Nuke" Goldstein, co-founder and technical director
• Harumi Urata-Thompson, former Chief operating Officer and Chief Investment Officer
• Jeremie Beaudry, former general counsel and office of a top compliance management company
• The former responsible person of the Johannes Treutler,Celsius trading unit, the person in charge of purchasing CEL tokens on behalf of Celsius
• Ariza Landers, former senior vice president of Vencias leasing enterprise, the other half of Toni Leon
• Stuart Maxine Leoni, the other half of Alex Maxine Leoni

"Mr. Masin Leoni, Mr. Lisbon, Mr. Goldstein, Mr. Bodry, Mr. Ulanta-Leonard and Mr. Trutler violated their fiduciary responsibilities for degrees Celsius," the lawyers wrote, adding:

"as we all know, Celsius promised customers unaffordable interest on the loan, but did nothing to solve the problem."

Lawyers also allege that such executives made "careless, reckless (and sometimes even self-centered) investments" that caused Celsius to lose $1 billion in a year, while mismanagement caused another $2.5 billion damage "because they could not fully prove the company's balance sheet."

"after that loss, they did not invest in or develop a limited company's system to adequately solve these problems, resulting in further losses," they claimed.

The resolution also alleges that such executives instructed Celsius to spend "hundreds of millions of dollars" on open market operations to raise the price of CEL tokens and, for its own benefit, "secretly sold millions of CEL tokens (or knew there would be such a market sale)".

Maximiliani has no scruples about betting hundreds of millions of dollars on the dynamics of the cryptocurrency market, and they stay out of it. They dilute the fact that Masin Leoni has repeatedly falsely claimed the investment and operation of Celsius.

Finally, when ℃ was asked to declare bankruptcy, the implicit defendant withdrew the property from the capsized ship […] At the same time, customers are actively encouraged to keep their property on Celsius software, "the lawyers added."

The Celsius creditors' committee said the proposed complaint was only "the first step in many processes" to investigate potential wrongdoing by former Celsius executives and return assets to victims.

A hearing system on the proposed complaints will be held on March 8.

Cointelegraph contacted Celsius for comment but did not receive an immediate response.