Celsius Chief Pressured by Creditors as FTX Eyes Assets

A new court filing shows creditor committee deemed Alex Mashinsky “unacceptable” in the role

article-image

Source: Shutterstock

share

key takeaways

  • The group intends to pursue actionable claims against Mashinsky and other Celsius insiders
  • FTX CEO Sam Bankman-Fried is reportedly eyeing the bankrupt crypto lender’s assets

Celsius’ former CEO Alex Mashinsky’s resignation came about after a committee representing the crypto lender’s creditors called for his removal, a court filing has revealed.

Since the group’s formation on July 27, the committee said it has been focused on protecting the interests of Celsius’ account holders and unsecured creditors. It pursued an investigation into Mashinsky and other company insiders as part of that process, including their “problematic asset deployment decisions.” 

Upon review, the committee found that retaining Mashinsky as CEO was “unacceptable and not in the best interests of the estates,” and that new leadership was vital.

They also decided that any restructuring efforts led by Mashinsky would likely face major challenges, and subsequently requested the Special Committee of the board of directors to remove him as CEO. 

Mashinsky officially stepped down from his post on Tuesday, saying in a letter of resignation to the Special Committee that his role was becoming an increasing distraction and apologized for the financial difficulties the company was faced with. He continues to hold the Director position at Celsius’ parent company. 

Former CFO Chris Ferraro was appointed interim CEO and chief restructuring officer. The creditor committee believes he is capable of overseeing Celsius’ assets and affairs and said it looks forward to further dialogue with him.

Even though Mashinsky is now no longer heading the company, the committee is yet to present the outcome of its investigation and pursue actionable claims against him and other insiders.

Celsius’ collapse rocked crypto markets earlier this year, leaving industry investors shaken by the knock-on effects of businesses freezing customer funds. Rival crypto lender Voyager also filed for bankruptcy, and now its assets have been sold to crypto exchange FTX for $1.4 billion. 

FTX waiting in the wings to scoop Celsius’ assets

FTX, which is looking to raise $1 billion, is now is reportedly weighing a bid for assets belonging to Celsius as well.

The as-yet undisclosed funding round, was confirmed by Bloomberg on Tuesday, citing a person familiar with both the raise and the acquisition bid.

Neither FTX CEO Sam Bankman-Fried nor a company spokesperson immediately replied to a request for comment.

Like Voyager, Celsius filed for Chapter 11 bankruptcy protection in July after halting withdrawals in June, and blamed “extreme market conditions” as its main reason for doing so.

It was later revealed Celsius had fallen victim to a “run on the bank” scenario when users became disillusioned with both the firm and the market downturn.

By July, the lender had fallen deep into the red, with $4.7 billion owed and 100,000 creditors banging at Celsius’ door requesting their money back.

Some creditors lent the firm cash without any collateral to secure obligations. Bankman-Fried’s trading firm, Alameda Research, is among those listed as one of the lender’s top 50 unsecured creditors.

Celsius’ main business was providing depositors interest on their digital assets stored on its platform, which were lent out in a variety of opaque ways, some proving to be risky.

At its peak, Celsius had managed around $8 billion in crypto loans with around $11.8 billion in assets, and served around 1.7 million users as of May 2022.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Paradigm’s Charlie Noyes thinks that the attention on stablecoins is well-deserved after Mesh’s $82 million round

article-image

Crypto may benefit from developments during the second quarter after a rough start to the year

article-image

With a friendlier regulatory outlook and the airdrop flow being stemmed, some are looking to how new native tokens can become valuable assets

article-image

The recent action paints an uncertain picture for future monetary policy moves

article-image

Is the finance world becoming “more liquid”? Experts give their takes as TradFi players consider new moves