Image source: Bitcoinist
On September 27, 2022, Celsius CEO Alex Mashinsky stepped down and expressed regret for his role in the bankrupt cryptocurrency lending company.
Mashinsky said his time at the company as an executive has resulted in “increasing distractions.”
The resignation letter
A New York law firm announced on Tuesday that Alex Mashinsky had filed his “I have decided to step down as CEO of Celsius Network today,” the statement said.
“I elected to resign my post as CEO of Celsius Network today,” the statement reads.
“Nevertheless, I will continue to maintain my focus on working to help the community united behind a plan that 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.”
“I remain willing and available to continue to work with the Company and their advisors to achieve a successful reorganization.”
In the letter, Mashinsky regretted the distraction his presence as CEO had brought to the company.
“I am very sorry about the difficult financial circumstances members of our community are facing.”
Alex Mashinsky was allegedly responsible for Celsius’ poor trading in early 2022, which later led to the cryptocurrency issuer’s bankruptcy.
Celsius and the rise in bankruptcy
In 2022, several cryptocurrency lenders witnessed the freezing of user withdrawals following the crash of the cryptocurrency markets in May.
Celsius was one of the first major cryptocurrency lenders to launch withdrawal and payment blocking.
Weeks of silence followed before Celsius filed for bankruptcy.
During the bankruptcy filing, the company announced that it had a $1.2 billion gap on its balance sheet.
On-chain data showed that Celsius quickly repaid the funds through several DeFi loans before filing for bankruptcy.
It turns out that this move was an attempt to avoid liquidating over $40 million in Bitcoin collateral.
Celsius eventually repaid the entire loan and got the money back.
Subsequent company operations and allegations
After repaying the loans, Celsius was allowed to sell the mined bitcoins to pay for its operations.
July data shows that the company’s business posted losses.
However, a New York judge ruled the decision would benefit investors.
Earlier this month, Vermont officials claimed Celsius had been unable to pay its debt since 2019.
Officials also claimed that Alex Mashinsky made false and misleading claims to exaggerate Celsius’ financial health.
CEO of bankrupt crypto lender Celsius Alex Mashinsky resigns