- Celsius CEO Alex Mashinsky was trading just before the accident and ignored the advice of his experts.
- He also banned the sale of GBTC shares in September.
The Financial Times reported that CEO Alex Mashinsky, who took control of the firm’s investment business in January, has regularly fired even experienced professionals.
According to the FT, he has ruthlessly engaged in a number of shady deals and defied proposals from financial advisers. He is also said to have ordered the sale of hundreds of millions of dollars worth of bitcoins, despite these being customer investments. 24 hours later he is said to have bought back the bitcoins – with a loss of 50 million dollars.
Mashinsky’s investment missteps led to frequent arguments between himself and Frank van Etten, Celsius’s then chief investment officer. Apparently the Celsius CEO was very optimistic about the Fed’s rate hike. He also wanted employees to start mitigating risk early. However, as of March 2022, the Fed did not confirm that interest rates would be raised.
More on the subject: Celsius bankruptcy: Customers are said to have forfeited their right to deposit
Despite the volatility of the crypto market at the time, token prices didn’t crash as expected and self-proclaimed chief trader Mashinsky’s trading hit the wall badly as primary safety procedures were not followed.
Bankruptcy came a few months later. In the subsequent bankruptcy proceedings, further mismanagement and high debts arose, which also had to be corrected upwards.
Celsius reviews new financing proposal
According to reports, Celsius is currently in a restructuring process and is evaluating various financing options. Kirkland & Ellis Celsius attorney Joshua Sasberg said the company is evaluating financing packages of various shapes and sizes.
A capital raise is reportedly planned to avoid liquidation. For August alone, the company requires an additional $66.4 million in cash. The company’s balance sheet could turn negative by October this year. Next week, the Celsius team will hold a meeting with the creditors’ representatives. Centigrade explains:
“It is our intention to capture any value associated with the recent crypto boom for our clients among the matters discussed in the recent hearings.”
A report by Coin Report states that Celsius underestimated its debt. According to a Coin report, Celsius’ current debt is currently $2.85 billion, while the company reported just $1.2 billion. Net debt is reported at $6.6 billion, while total assets under management are $3.8 billion.
People got angry with me when I said #Celsius is missing #Bitcoin and they made up numbers with fake $CEL ratings. He confirmed that he had lost 67,147 #BTC and $WBTC, which is 64% of his #BTC debt. $438 million hole assuming they can all dump $CEL for $1 pic.twitter.com/KEQg7iu9bP
— Simon Dixon (careful impersonator) (@SimonDixonTwitt) August 15, 2022