Tag: alex mashinsky

Celsius Denies Allegation of CEO Leaving US

Celsius Network on Monday denied reports of the CEO leaving the US, claiming that all related allegations are false.

A spokesperson from Celsius responded to Blockchain.News saying:

“Consistent with our previous messages, all Celsius employees – including our CEO – are focused and hard at work in an effort to stabilize liquidity and operations.  To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.”

The crypto lender platform’s CEO Alex Mashinsky was reportedly stopped by authorities from leaving the U.S., amid insolvency rumours about his company. 

Mashinsky’s failed exodus was first disclosed by crypto analyst Mike Alfred on his Twitter account on Sunday local time. He tweeted saying Mashinsky was trying “to leave the country this (last) week via Morristown Airport (in New Jersey) but was stopped by authorities.”

According to Alfred, the Ukraine-born CEO was trying to flee to Israel. However, his claims and sources have not been verified.

Alfred’s tweet also added that Mahinsky current whereabouts are unclear. Details about whether he is under custody are yet to be revealed.

The cryptocurrency loan company allows users to deposit cryptocurrency digital assets into a Celsius wallet to earn a percentage yield or take out loans by placing their cryptocurrencies as security.

Currently, the crypto market is under high volatility since the US FED’s increase in interest rates in early May 2022.

Rumours about insolvency have been floating around since Celsius decided to freeze withdrawals, swaps or transfers among all accounts in June, citing extreme market conditions. The company has repeatedly claimed that it would take time to resume its operation.

However, the company has started repaying clients to regain liquidity and re-open withdrawals. Recently, Celsius repaid interest-yielding DeFi service Compound Finance with $10 million worth of the DAI stablecoin, according to a report from Crypto Briefing.

According to a report from Blockchain.News, Celsius has also paid $53.6 million DAI in a series of transactions to its vault with Oasis Protocol, a yield-bearing DeFi platform.

Furthermore, Celsius has also stopped unaccredited investors from paying interest since April 15. Under the new plan, users with existing funds in their Earn accounts have continued to earn interests as long as the funds remain in such accounts.

The platform has recruited experts from Citigroup on possible solutions for financing options to battle insolvency fears. The Wall Street Journal indicated that Celsius has even hired consultants from advisory firm Alvarez & Marsal to seek advice or possibly bankruptcy filing.

According to a report from Coindesk, Goldman Sachs is planning on acquiring Celsius by raising $2 billion from investors.

Celsius network has over $12 billion in Assets Under Management and over $8 billion in assets lent out to investors. With the notion of bankruptcy on the horizon, Celsius Network is also acting in a way that will heighten people’s suspicion.

Meanwhile, according to a report from Washington Post, Celsius’ recent activities have also drawn regulators from at least five States, including Texas, New Jersey, Alabama, Kentucky and Washington, to investigate.

Subject to the latest rumour, Celsius’s token (CSL) has dropped to over 20%, trading at around $0.7939 during the intraday.

Celsius CEO Alex Mashinsky Involves Untimely Trading Prior to Crash: FT

The fall of renowned crypto lending platform Celsius Network has shed much light on the wobbled operations of the company in the months leading to the eventual halt in withdrawals. 

Alex Mashinsky and the Trading Funds Misappropriation 

According to a Financial Times (FT) report, the company’s Chief Executive Officer, Alex Mashinsky, has been practically handling the firm’s trading activities since January. The report highlighted that the role assumption fueled the rancour that eventually made Celsius’ Chief Investment Officer (CIO) at the time, Frank van Etten.

Frank’s LinkedIn profile revealed that he left the company back in February, about four months before Celsius Network eventually halted withdrawals and the ensuing bankruptcy saga it is currently embroiled in.

According to the sources who spoke to the FT, Alex Mashinsky made some decisions related to the projection that the United States Federal Reserve would increase interest rates. While taking control of the firm’s trading activities was one of his actions, he also informed staff as early as January 21 that there were plans to cut costs.

Sources reportedly told the Financial Times that Mashinsky ordered the traders to “massively trade the book using bad information,” while another said that “he was slugging around huge chunks of bitcoin.”

Despite the influence Mashinsky notably wielded in the firm, the FT report noted that he was vocal about the fact that “he wasn’t running the trading desk.” While the actual figures of losses due to the influence he wielded remain unknown, the FT report shows it was worth millions of dollars.

Celsius Network and the Huge Debt Profile

Earlier, Blockchain.News reported that the latest coin report from Celsius Network revealed a bigger than reported hole in its balance sheet. The company revealed in its bankruptcy filing that its debt profile was $1.2 billion, but with recently published data, this figure was discovered to be worth $2.8 billion.

Celsius Network is deeply embroiled in the bankruptcy hearings, and ideas on how it will navigate these dark times are unclear.

Celsius CEO Resigns amid Broader Bankruptcy Tango

Alex Mashinsky, the Chief Executive Officer of the embattled crypto lending firm Celsius Network, has tendered his resignation as the head of the firm, effective immediately.

As contained in a Press Release from the company, the resignation letter was handed over to the Company’s Special Committee of the Board of Directors.

The resignation letter sent by Mashinsky reads:

“Effective immediately, please accept my resignation as CEO of Celsius Network Ltd, as well as my directorships and other positions at each of its direct and indirect subsidiaries, with the exception of my director position at Celsius Network Ltd. 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. I am committed to helping the Company continue to flesh out and promote that plan in order to help account holders become whole.”

Mashinsky co-founded the Celsius Network alongside Daniel Leon back in 2017, and the firm grew to become one of the most celebrated crypto lending platforms in the crypto world. 

The company’s operation hit the rocks in June when it halted withdrawals and finally declared bankruptcy after it realized that internal restructuring and staff layoffs would be insufficient in helping to solve its liquidity woes. 

The resignation of Mashinsky is coming at a time when the company is neck deep into bankruptcy proceedings, and the former CEO said his exit would position him in a better place to help every stakeholder get the best out of the company in the end.

Unlike Celsius Network, Voyager Digital, another bankrupt player, is on its way to being acquired by FTX after the exchange behemoth won a bid to acquire it for $1.4 billion.

Celsius Network Conditionally Not to Enforce Debtors to Pay for Outstanding Loans

Beleaguered digital currency lender Celsius Network has revealed that it was not planning to ask its debtors to pay their outstanding loans during its Chapter 11 bankruptcy proceedings.

Over the weekend, Reuters reported that with the bankruptcy that the firm has filed, there is no plan to enforce payment despite the need to settle its creditors.

As reiterated by the firm through a filing at the U.S. Bankruptcy Court for Southern District of New York, penalties and interests will also not be levied on its debtors as part of its plans to get back on its feet.

Celsius Network is the first amongst many crypto unicorns to suspend withdrawals as the aftermath of the Terra ecosystem collapse, and the extreme crypto market plunge became too much to bear. The crypto lender tried to settle its financial woes internally but eventually declared bankruptcy in July.

At the time of its bankruptcy, the company said it had about a $1.19 billion deficit on its balance sheet. However, this sum has been shown to exceed this amount. 

The firm’s assets and liabilities are estimated to be between $1 billion and $10 billion. Celsius Network has had it rough since pausing withdrawals, and the firm rebuffed one of the earliest offers of acquisition from Swiss competitor, Nexo.

In a bid to solve its woes and bring a speedy recovery to all of its stakeholders, Alex Mashinsky resigned his role as the Chief Executive Officer of the platform, taking a background role to help get succour to all involved. 

The downfall of Celsius Network, as well as that of Babel Finance, affected Zipmex which also suspended withdrawals and declared bankruptcy in Singapore. The cataclysmic event emanating from the LUNA crash has affected more crypto unicorns than Celsius Network, Babel Finance, and Zipmex.

With analysts projecting revival in the next couple of years, exchanges like Binance and FTX have been aiding most distressed firms.

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