Image source: Bitcoinist
On September 27, 2022, Celsius CEO Alex Mashinsky resigned, talking about his regret over his role in the bankrupt cryptocurrency lending company.
Mashinsky said his time at the company as its leader has led to “increasing distractions.”
The letter of resignation
A New York law firm announced Tuesday that Alex Mashinsky has submitted his “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 deplored 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 reportedly responsible for poor Celsius trading in early 2022, which later led to the cryptocurrency lender’s bankruptcy.
Celsius and the buildup to bankruptcy
In 2022, several cryptocurrency lenders witnessed the freezing of user withdrawals following the collapse of the cryptocurrency markets in May.
Celsius was one of the first large cryptocurrency lenders to start the withdrawal block.
Weeks of silence followed before Celsius filed for bankruptcy.
While filing for bankruptcy, the company announced it had a $1.2 billion gap on its balance sheet.
On-chain data showed that Celsius quickly repaid the money through several DeFi loans before filing for bankruptcy.
It was revealed that the move was an attempt to avoid liquidation of over $40 million of collateral in Bitcoin.
Celsius eventually paid off the entire loan and got the money back.
Subsequent business operations and allegations
After repaying the loans, Celsius was allowed to sell the mined Bitcoins to pay for its operations.
Data for July shows that the company’s operations were at a loss.
However, a New York judge ruled that the decision would benefit investors.
Earlier this month, Vermont officials alleged that Celsius has been unable to pay off its debts as far back as 2019.
Officials also claimed that Alex Mashinsky made false and misleading claims to exaggerate Celsius’ financial health.