Celsius Network CEO Led Trading Desk For Months, Report Reveals

Celsius Network CEO Led Trading Desk For Months, Report Reveals

Celsius Network CEO Led Trading Desk For Months, Report Reveals

Celsius Network CEO Alex Mashinsky took over the crypto lender’s trading strategy operations in January, months before the platform filed for bankruptcy, the Financial Times reported.

The decision was reportedly made ahead of a meeting of the US Federal Reserve, where it was to set out a cuts plan due to inflation concerns. The report highlights that Mashinsky was confident that a hawkish outcome would cause crypto prices to plummet.

The CEO would have directly ignored the transactions

Several people familiar with the situation told the FT that Mashinsky personally led individual trades and canceled executives with decades of finance experience in the days leading up to the Fed meeting.

The report also recounts an incident in which the head of Celsius ordered hundreds of millions of dollars worth of bitcoin to be sold without double checking, only to buy the stake back at a loss a day later.

“He was ordering traders to massively trade the book for bad information,” a person familiar with the matter noted. “He was dragging huge chunks of bitcoin.”

Another source with knowledge of the situation said that while Mashinsky could have expressed his opinions based on his understanding of the cryptocurrency markets, they emphasized that “he was not running the trading desk.”

Celsius “run out of money” by October

Celsius Network announced on July 14 that it had officially filed for Chapter 11 bankruptcy. The announcement came after months of struggling to keep the company afloat after the 2022 stock market crash.

According to court documents filed Sunday, Celsius’ liquidity can only sustain it until October 2022. Operating costs and capital expenditures will increase its cash flow to $34 million, according to the filing. He also reveals that he would lose $137 million between August and October, mainly due to his mining operations.

According to balance sheet data previously released in the bankruptcy proceedings cited by FT, Celsius’ liabilities exceeded its assets in March this year, except for holdings of its own digital coin CEL. According to two people with knowledge of the situation, this has been the case since 2021.

That said, a former employee of the struggling crypto lender, who filed a lawsuit in July, had accused the company of market manipulation and risk management failures. In the complaint, Jason Stone, the founder of KeyFi, also said that “the company’s entire portfolio was exposed to the market”, without sufficient coverage.

“He had a strong belief in the seriousness of the market moving south. He wanted us to start reducing risk like Celsius could,” another person noted, as disagreement grew over the approach.

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