Alex Mashinksy has stepped down as CEO of Celsius Network as part of the bankruptcy proceedings that are underway within the cryptocurrency lending company.
In a press release, Mashinksy, who founded Celsius, said his role as CEO had become an increasing distraction for the struggling company, hence his decision to quit.
“Effective today, please accept my resignation as CEO of Celsius Network Ltd, as well as my directorships and other positions in each of its direct and indirect subsidiaries, with the exception of my position as director at Celsius Network Ltd,” reads the text of the resignation letter submitted to the company’s board.
Despite his resignation, Mr. Mashinksy says he is ready to remain available to work with Celsius and his advisers in order to achieve a successful reorganization. He also urged the Celsius community to stick together to achieve the best turnaround outcome possible.
“I believe we will all achieve more if Celsiusians stick together and help UCC with the best turnaround plan. I remain willing and available to continue to work with the company and its advisors to achieve a successful reorganization,” he said. he declared.
Mashinksy’s resignation is the latest development at Celsius, which filed for Chapter 11 bankruptcy protection last July in a bid to voluntarily begin a 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 hold the position. Chief Restructuring Officer and Interim CEO.
“Today’s announcement is a positive step that will allow debtors, the committee and all other stakeholders to focus on moving these cases forward quickly and efficiently,” the filing reads.
The Celsius bankruptcy debacle
Over the past few months, Mashinksy has been accused of having a significant role to play in the crash of the cryptocurrency company. CNBC showed that multiple employees and leaked internal company documents painted a picture of risk-taking, disorganization and alleged market manipulation before the company collapsed in May, following the onset of market turmoil.
According to the article, Celsius was luring users by promising high annual interest rates, lending money to hedge funds willing to pay higher returns, all without a very small compliance team and almost no risk management. In May, Celsius was one of the biggest players in the crypto lending space with over $8 billion in customer loans and nearly $12 billion in assets under management.
Celsius isn’t the only crypto company that has struggled. Others include crypto lenders BlockFi and Travel Digitalas well as the crypto hedge fund 3AC.
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