Celsius CEO steps down amid bankruptcy proceedings


Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) -Celsius Network said on Tuesday Chief Executive Officer Alex Mashinsky has decided to step down and the bankrupt crypto lender appointed finance chief Chris Ferraro as its interim CEO.

Before Celsius, Ferraro spent nearly 18 years at JPMorgan Chase & Co. Celsius also said Ferraro would serve as the company's chief restructuring officer.

"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," Mashinsky said in a statement.

Mashinksy, who did not immediately respond to a Reuters, request for comment, chose to step down at a time the company is seeking protection from creditors.

In his resignation letter to the company's board of directors, Mashinsky said he remains committed to helping the company develop and promote a plan to return deposits to customers.

Celsius, based in Hoboken, New Jersey, filed for Chapter 11 bankruptcy on July 13, one month after freezing withdrawals and transfers for its 1.7 million customers because of "extreme" market conditions and listing a $1.19 billion deficit on its balance sheet.

Crypto lenders like Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. They lent out tokens to mostly institutional investors, making a profit from the difference.

But the lenders' business model came under scrutiny after a sharp crypto market sell-off earlier this year, spurred by the collapse of major tokens terraUSD and luna.

Last month, Celsius sued a former investment manager, accusing him of losing or stealing tens of millions of dollars in assets before the crypto lender went bankrupt.

Rival crypto lender Voyager Digital, which also filed for bankruptcy in July, said on Monday that crypto exchange FTX won a $1.42 billion bid to acquire its assets at an auction.

(Reporting by Mehnaz Yasmin in Bengaluru and Hannah Lang in Washington; additional reporting by Tom Wilson in London; Editing by Maju Samuel and Jonathan Oatis)

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

   

Next In Tech News

31 years’ jail for ‘depraved sexual predator’ in S’pore who preyed on 20 girls
Amazon workers stole nearly US$10mil from company to buy real estate, luxury cars, US cops say
Japan's ZOZO founder Maezawa: to make ‘big announcement’ about space after meeting Elon Musk - tweet
Tencent and Alibaba’s AI models understand Chinese better than humans, new rankings show
352 victims in S’pore duped by fake buyers on Carousell since November
Indonesia central bank says digital rupiah currency can be used in metaverse
World Cup interest is so high in Japan that a streamer can’t cope
US hoax trials spotlight misinformation profiteer
As chatbot sophistication grows, AI debate intensifies
New Zealand plans law to require Facebook, Google to pay for news

Others Also Read