Celsius CEO Alex Mashinsky Took Risky Decisions, Causing a $50M Loss
According to Reports, the CEO of Celsius Took Dangerous Actions That Resulted in a Loss of $50 Million.
Alex Mashinsky acquired control of the Celsius trading system a few months before the company went bankrupt.
Concerning trading decisions and Frank van Etten’s involvement with the trading style, Mashinsky and Frank van Etten, the company’s previous chief investment officer, constantly argued with one another.
In July, Celsius presented its petition for bankruptcy under chapter 11 with approximately $4 billion in consumer debt. During the last month, the corporation has been the center of investigations, including those that authorities have carried out in Canada.
Alex Mashinsky is reported to have taken control of Celsius’ trading decisions, which resulted in a loss of $50 million in January. This information comes from the Financial Times.
According to the sources, Mashinsky got together with his investment team in January to inform them that he would be managing the company’s trading plan on his own.
What Contrary Actions did Mashinsky take?
He gave the trading team the instruction to sell Bitcoin worth hundreds of millions of dollars to get ready for aggressive results and his opinion that the price of the cryptocurrency would drop. He failed to seek the counsel of internal financial advisors and failed to give Celsius’ holdings the respect they merited in his assessment of the company’s assets.
According to the article, Mashinsky allegedly rendered ineffective executives with decades of experience in the financial markets as part of his trade makeover in the days before the Fed meeting. This supposedly occurred in the days before the Fed meeting.
The following information was relayed to the Financial Times by an unnamed member of the team:
He authorized the dealers to trade the book based on bogus information heavily and gave them the go-ahead to do so. He was carrying enormous amounts of bitcoin in his various pockets.
After that, problems arose between Mashinsky’s management style and those of Celsius Chief Investment Officer Frank van Etten, which ultimately resulted in van Etten being asked to leave the business in February after serving only a few short months.
After the meeting of the Federal Reserve, the price of cryptocurrencies dropped even lower. In January, Celsius experienced losses of $50 million, despite having a total of $22 billion in customer funds at the time.
On the other hand, it is not clear what percentage of that figure can be attributed to Mashinsky’s participation in the trading strategies employed by the company.
The attorneys for Celsius believe that the decline in the price of cryptocurrencies was a more significant factor in the company’s demise than any carelessness on the part of Celsius. Celsius went from being a firm worth $3 billion in December 2021 to being in the red and insolvent shortly after that.
In a written statement, those who own debts issued by Celsius stated that Mashinsky intentionally misled the general public about anything. It is alleged that Mashinsky misled clients into believing that their money was safe before declaring bankruptcy a month later in public recordings and comments that he posted online.
The failure of the cryptocurrency industry in 2022 was mostly driven by the fall of the largest crypto lending companies. Celsius Network, Voyager, and Three Arrows Capital were the three businesses that were most adversely affected. Even though it seems like the market is making a slow but steady recovery, business owners are still having a difficult time.