According to a recent report published on Tuesday, the Israeli-American founder and CEO of Celsius Network, Alex Mashinsky, was in charge of the company’s trading strategy. The report, citing multiple people familiar with the matter, said Mashinsky sold millions of dollars’ worth of bitcoin in anticipation to buy bitcoin cheap. Except after the CEO allegedly placed this bet, bitcoin markets followed the opposite trend, and the leading crypto asset accumulated some gains.
People Familiar With the Celsius Situation Say Mashinsky Was Trading on ‘Bad Information’
On Tuesday, the Financial Times (FT) reported on the embattled and bankrupt crypto lender Celsius and the company’s CEO. FT’s report citing people familiar with the situation explained that months before the company filed for bankruptcy protection, Mashinsky “took control of Celsius trading strategy.” Allegedly, the founder and CEO of Celsius made a number of bad bets with large sums of bitcoin (BTC) and other assets.
“He was ordering the traders to massively trade the book off of bad information,” one of the people quoted in the report said. “He was slugging around huge chunks of bitcoin,” the anonymous source added. However, another person FT quoted in the report, explains that the Celsius CEO’s perspective may have been said out loud, but the individual insisted “[Mashinsky] was not running the trading desk.”
The founder and CEO of Celsius Network, Alex Mashinsky.
Despite the contrary opinion from the individual, people familiar with the matter speaking under anonymity, told FT that Mashinsky repeatedly “clashed” with the company’s former CIO. The tensions stirred over Mashinsky allegedly involving himself in specific Celsius trades. “He had a high conviction of how bad the market could move south,” another anonymous source said in the report published on August 16. “He wanted us to start cutting risk however Celsius could,” the person added.
The accusations revolving around Mashinsky follow the crypto lending company’s customers writing letters to the bankruptcy court, and pleading with the authorities to get their funds back. Customers explained that they were suffering from financial hardships over Celsius freezing their funds and said it was a dire emergency to get their funds back. For instance, Celsius customer Brandon Lawrence wrote:
I am one of the little guys … It was my nest egg. Now when I go to work, I drink water and eat any scraps I can find for lunch … I am in deep depression and do not know if I can pull myself out of this.
Additionally, five days ago, a Ripple Labs spokesperson spoke with Reuters and explained that the distributed ledger firm Ripple was “interested in learning about Celsius and its assets.” Celsius is part of a large number of trouble crypto companies in 2022, as Voyager Digital, Babel Finance, Three Arrows Capital (3AC), Hodlnaut, and Vauld have all seen financial hardships this year. Most of these companies have sought help from financial regulators or the courts in order to remedy the insolvencies.