celsius netwok ceo collapse
Crypto collapse

Celsius : CEO Alex Mashinsky alleged business decisions led to bankruptcy

Alex Mashinsky allegedly took control of Celsius’ business decisions, resulting in a $50 million loss in January, the Financial Times reported.

Following the January 2022 Federal Reserve meeting, Celsius CEO Alex Mashinsky reportedly stepped in to direct the company’s business strategy. In anticipation of a hawkish outcome and his belief that crypto prices would collapse, he ordered the trading team to sell hundreds of millions of dollars of Bitcoin. He did not consult with internal financial experts and did not properly consider Asses Celsius’ holdings.

An anonymous team member told the Financial Times:

He was ordering traders to massively trade the book for bad information. He was trolling huge chunks of bitcoin.

The result of Mashinsky’s decision was that Celsius had to buy back the bitcoin a day later, taking a $50 million loss. His business decisions would have been based on his knowledge and intuition, without advice from outside experts.

Mashinsky’s autocratic approach to running the company at the time led to internal clashes with Celsius investment director Frank van Etten, who was forced to leave the company in February, just four months after his arrival.

Complications in Mashinsky’s business decisions, mismanagement of $2 billion and weak asset tracking systems led Celsius to file for bankruptcy in July. At the time, Mashinsky claimed that Celsius’ assets had grown faster than its ability to invest, making “some poor asset deployment decisions.”

 

Mashinsky intentionally misled the public

Alex Mashinsky has been indicted by several investigations as the cause of Celsius’ collapse.

In an official statement, Celsius’ unsecured lenders claimed that Mashinsky intentionally misled the public. According to the report, Mashinsky falsely promised customers that their funds were safe through his public videos and messages, only to file for bankruptcy a month later.

The Department of Financial Protection and Innovation (DFPI) also charged Mashinsky, following a cease-and-desist order in Celsius. Mashinsky, along with his company, was accused of providing incomplete information about the risk associated with using the interest-bearing “earnings program. As a result, many were made aware of Celsius’ inability to meet large withdrawal requests prior to its bankruptcy filing.

 

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