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. The bitcoin market followed the reverse trend after Mashinsky allegedly made this bet. However, the most popular crypto asset saw 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.”
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. Tensions rose over Mashinsky’s alleged involvement in certain 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 stated that Celsius had frozen their funds, and they needed their money back urgently. Brandon Lawrence, a Celsius customer wrote this:
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. These companies sought out help from courts or financial regulators to resolve their problems.
What do you think about the report that says Alex Mashinsky was taking charge of the company’s trading strategy? Please comment below to let us know your thoughts on this topic.
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