Celsius Chief Pressured by Creditors as FTX Eyes Assets

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


Source: Shutterstock


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.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (10).jpg


Kinto's novel L2 prioritizes compliance, security, and the user experience.


Whether you decide to invest in bitcoin should be up to you, not the SEC or Gary Gensler


Plus, Sanctum’s upcoming airdrop for its new CLOUD token


The $887 million of net inflows was the category’s second-best total in a single day since their January launches


The industry-first general purpose zk programmable blockchain charts a fresh course


Cause of $300 million-plus “unauthorized leak” still unknown as company gets set for big fundraise


The term DePIN has become a buzzword — and many projects are misusing it to attract attention