Alex Mashinsky, CEO of Celsius Network, “took control” of the platform’s trading strategy at the start of the year and faced cooperation. Financial Times cites reliable sources when discussing this.
The decisions made by the Mashinsky on the eve of the Fed meeting in January cost “millions of dollars.” He was certain that the market for digital assets would continue to decline.
The Fed hinted at raising rates at its first meeting of 2022, but decided to wait until March. After the decision, the price of Bitcoin increased significantly, and it took until May—along with Terra’s collapse—for the cryptocurrency market to exit at new lows.
Mashinsky personally oversaw each transaction and overturned choices made by financial executives with years of experience. Frank van Etten, the CEO and chief investment strategist, became embroiled in a dispute as a result, and he left the company in February.
The team discussed “mass trade on false information.” For example, without considering the size of the long position, the CEO once ordered the sale of the “first cryptocurrency worth hundreds of millions of dollars.” The loss was fixed the following day after the short positions were closed.
The article also mentioned the blocking of the Mashinsky sale of 11 million GBTC, which the firm had paid a premium for but which had been sold at a 15% discount to NAV. At the time, the shares of the Bitcoin Trust were valued at $400 million. When the discount increased to 25% in April, the CEO decided to sell the asset. This operation had a loss of between $100 million and $125 million.
Later, The Celsius Network made an effort to cut losses by obtaining loans in steablecoins from other cryptocurrency companies in exchange for tokens it held as collateral. This made the platform more vulnerable to changes in the price of cryptocurrencies.
The most recent estimate indicates that Celsius Network could lose $137 million between August and October as a result of mining investments and restructuring expenses. The amount of the “hole” in the company’s balance sheet was $2.85 billion.
Prior to the freezing of clients’ assets, Mashinsky gave assurances that the platform’s creditor committee deemed to be “empty and false.”
Remember that Celsius filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in the New York Court on July 13?
The company presented a business reorganization plan on July 19. It entails using the mining subsidiary’s profits to reimburse users for losses and settle debts. Celsius Mining had previously submitted an IPO application to the SEC.
On August 12, it was revealed that the Celsius Network creditor committee had successfully stopped the company from selling a portion of the Bitcoin it had mined during a bankruptcy court hearing.
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