Bankrupt crypto lender Celsius loses another executive as CEO review intensifies

In connection: The bad news doesn’t relieve bankrupt crypto lending platform Celsius. A week after CEO Alex Mashinsky left the company, co-founder S. Daniel Leon has resigned as Chief Strategy Officer. Mashinsky is also dealing with revelations that he withdrew $10 million from the lender weeks before client accounts were frozen.

Shortly after crypto winter began in June, decentralized finance (DeFi) platform The Celsius Network, which was then one of the largest crypto lenders with $8 billion in customer loans and nearly $12 billion in assets, shared itss 1.7 million customers said it was suspending all withdrawals, exchanges and transfers between accounts due to “extreme market conditions”. The company filed for bankruptcy just a month later.

Things haven’t improved since then. Mashinsky submitted his letter of resignation last week, writing that his continued role as CEO had “become a growing distraction.”

CNBC reports that Chief Strategy Officer Leon has now resigned. He will be replaced by Lior Koren, Celsius’ former Global Tax Director, who will be based in Israel. Cointelegraph writes that Leon petitioned the US bankruptcy court to have his 32,600 common shares in the company declared worthless on September 5.

Mashinsky is also facing many questions over the Financial Times report that he withdrew $10 million from Celsius a few weeks before customer accounts were frozen. The FT writes that he withdrew the money in May, just as crypto markets were reeling from the TerraUSD (UST) collapse. Many wonder if Mashinsky knew that Celsius cannot return client assets.

According to a spokesman for Mashinsky, the former CEO and his family still had $44 million in crypto assets frozen at Celsius even after making the $10 million withdrawal he voluntarily submitted to the Official Unsecured Creditors Committee (UCC ) had disclosed in the insolvency proceedings. The spokesman said about $8 million of the money was used to pay state and federal taxes, but the FT notes that under US law, Mashinsky may be required to repay the full $10 million. Bankrupt crypto lender Celsius loses another executive as CEO review intensifies

Chris Barrese

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