Alex Mashinsky, co-founder and CEO of the bankrupt crypto lender Celsius Network, resigns
For some reason, we’re late to the latest development at bankrupt crypto lender Celsius Network. Apparently, Celsius co-founder and CEO Alex Mashinsky submitted his letter of resignation Tuesday, two months after the crypto company filed for Chapter 11 bankruptcy protection.
Celsius said that Mashinsky’s resignation was effective immediately, but added that the once high-flying co-founder will continue to help the company provide creditors with the “best outcome.”
In a statement, Mashinsky said: “I elected to resign my post as CEO of Celsius Network today. Nevertheless, I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the Company filed for bankruptcy,” Mr. Mashinsky said. He continued: “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.”
“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 Mr. Mashinsky’s resignation letter reads.
“I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing.” he wrote in the letter.
“Since the pause, I have worked tirelessly to help the Company and its advisors put forward a viable plan for the Company to return coins to creditors in the fairest and most efficient way. I am committed to helping the Company continue to flesh out and promote that plan, in order to help account holders become whole.”
It all started in early June when the embattled crypto lender Celsius froze withdrawals for 1.7 million of its crypto holders in the wake of a collapse in cryptocurrency prices, citing what it described as “extreme market conditions.” Three days later, we predicted that “bankruptcy may be the only option for the crypto lending startup.” Then in July, Celsius filed for bankruptcy.
Celsius is one of the many startups with exposure to now bankrupt Three Arrows Capital (3AC). Others include BlockFi and Voyager Digital. As recently as March of this year, 3AC managed about $10 billion in assets, making it one of the largest crypto hedge funds in the world. Lawyers representing Three Arrows’ creditors say the firm’s founders Zhu Su and Kyle Davies have gone missing and their physical whereabouts are “currently unknown
Meanwhile, back in June, Celsius said it froze withdrawals, as well as transfers between accounts, “to stabilize liquidity and operations while we take steps to preserve and protect assets.”
“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the New Jersey-based company said.
Mashinsky, the CEO, was quoted in October last year saying Celsius had more than $25 billion in assets. The company’s website, which urges customers to “Earn high. Borrow low,” said it offers interest rates of up to 18.6%.
Founded in 2017 by Alex Mashinsky and S. Daniel Leon. It lets you earn interest on your crypto and instantly borrow against it. That startup has built the next generation of decentralized lending and borrowing products leveraging cryptocurrency. Celsius Network addresses the financial needs of today’s consumers worldwide through a high-interest income and low-cost lending accessible via a mobile app.