Alex Mashinsky. Source: a video screenshot, Stoic Finance / YouTub
Alex Mashinksy has resigned from his role as the CEO of Celsius Network amid ongoing bankruptcy proceedings at the crypto lending company.
In a press release, Mashinksy who founded Celsius stated that his continued role as CEO has become an increasing distraction for the embattled company hence his decision to resign.
“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,” the text of the resignation letter submitted to the company’s board of directors read.
Despite his resignation, Mashinksy says he is willing to remain available to work with Celcius and its advisors to achieve a successful reorganization. He also admonished the Celsius community to stay united to achieve the best recovery outcome.
“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,” he said.
Mashinksy’s resignation is the latest development at Celsius which filed for chapter 11 bankruptcy back in July as it sought to voluntarily initiate restructuring to stabilize its business and maximize value for all its stakeholders.
In a filing with the U.S. Bankruptcy Court, the Uncensored Creditors Committee (UCC) involved in the case welcomed his resignation and announced that Chris Ferraro, the company’s Chief Financial Officer would now serve as the Chief Restructuring Officer and Interim CEO.
“…today’s announcement is a positive step that will allow the Debtors, the Committee, and all other stakeholders to focus on moving these cases forward in a prompt and efficient manner,” the filing denoted.
The Celsius bankruptcy debacle
In the past few months, Mashinksy has been accused of having a significant role to play in the crash of the crypto company. CNBC reported that multiple employees and leaked internal documents of the company painted a picture of risk-taking, disorganization, and alleged market manipulation before the May collapse of the company following the onset of market turmoil.
The report alleges that Celsius was drawing in users with promises of high APYs, lending money to hedge funds willing to pay higher yields, and doing this without a very small compliance team and almost no risk management. As of May, Celsius was one of the largest players in the crypto lending space with more than $8 billion in loans to clients and almost $12 billion in assets under management.
Meanwhile, Celsius is not the only crypto firm that has been struggling. Others include crypto lenders BlockFi, and Voyager Digital, as well as crypto hedge fund 3AC to mention a few.