Alex Mashinsky, the CEO of cryptocurrency lender Celsius Network, resigned Tuesday, apologizing to customers for the “difficult financial circumstances” in which the company’s bankruptcy had left them.
Summary
The CEO of the Celsius platform resigns
The CEO of currency lender Celsius, which filed for bankruptcy last July due to a hole in its balance sheet of more than $1 billion, has submitted his resignation, acknowledging with such a gesture (even deemed late by some) responsibility on his part in the company’s bankruptcy.
The news comes two months after the company filed for Chapter 11, the antechamber to bankruptcy for American companies.
Mashinsky, in a press release, stated:
“I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the Company filed for bankruptcy. I believe we all will get more if Celsians stay united and help the UCC with the best recovery plan.”
According to the bankruptcy petition filed by the court in July, the Celsius company would have accrued $1.2 billion in debt on its balance sheet, making it one of the highest-profile victims of the collapse in the cryptocurrency markets earlier this year. In August, the Financial Times had specifically accused the CEO himself of bearing heavy responsibility for the company’s failure. It would be he, according to the British newspaper, who had personally taken some trading decisions that led to huge losses to the company’s accounts.
According to some inside sources cited by the newspaper, Mashinsky’s management of the company would have been very autocratic and would have also led to the departure of the Frank Von Etten, who resigned in February this year.
On the other hand, in July, the KeyFi company filed a fraud complaint in New York court against Celsius, accusing it of being a kind of Ponzi scheme.
Henceforth, this whole series of factors evidently convinced the CEO to make a painful but now seemingly inevitable choice:
“I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing. Since the pause, I have worked tirelessly to help the Company and its advisors put forward a viable plan for the Company to return coins to creditors in the fairest and most efficient way.”
The price of the Celsius (CEL) token
The news caused the token to drop a further 7%. Founded in 2017 by Mashinsky himself and Daniel Leon, Celsius had grown by leaps and bounds especially in 2021, thanks to the booming market and the growth of new sectors such as NFTs and DeFi. Â
By May the company had $8 billion in customer loans and as much as $12 billion in assets under management. Then there was the Terra ecosystem debacle, to which Celsius was highly exposed, causing the company to collapse to bankruptcy in July.
Mashinsky tried until the end to hold on to his position while also trying to reassure the company’s clients to whom he guaranteed repayment of what was owed. But evidently, the situation may be even worse than it appears, and the choice of resignation may have been the only alternative left for the company’s controversial founder.
