Celsius Network Ltd. Chief Executive Officer Alex Mashinsky, who founded the embattled crypto startup and served as pitchman for the sky-high yields it promised to its thousands of investors, is stepping down as the company works its way through…
The Hoboken, N.J.-based company said it appointed Chief Financial Officer Chris Ferraro, a JPMorgan Chase & Co. veteran, to the role of chief restructuring officer and interim CEO.
Mashinsky, 56, who co-founded Celsius in 2017, said that he will continue “working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the company filed for bankruptcy,” according to a statement from Cadwalader, Wickersham & Taft LLP, the law firm representing Mashinsky.
Under Mashinsky’s leadership, Celsius became mired in an increasing number of controversies. The company froze user withdrawals in June as it experienced liquidity issues, faced a lawsuit in July that called the firm a “Ponzi scheme” and disclosed a US$1.19 billion deficit in its bankruptcy filing later that month. Along with Gemini Trust Co. and Voyager, Celsius faced scrutiny earlier this year from the U.S.
Mashinsky “doesn’t have any credibility to push through any reorganization plans, given his track record,” Mike Alfred, a private investor who co-founded BrightScope Inc. and who has been a notable critic of Celsius even before it filed for bankruptcy, said. “In order to get a reorganization plan approved, he probably has to walk away.”
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