Celsius Network Ltd. Chief Executive Officer Alex Mashinsky is stepping down as the company works its way through bankruptcy. Mashinsky founded the embattled crypto startup and served as a pitchman for the sky-high yields it promised to its thousands of investors.
The company announced the appointment of Chief Financial Officer Chris Ferraro, a former JPMorgan Chase & Co. executive, as a chief restructuring officer and interim CEO.
The change in leadership represents a significant shift for the company, which filed for bankruptcy protection in July. Celsius was one of the most notable victims of this year’s crypto market meltdown, which began in May with the collapse of the TerraUSD algorithmic stablecoin and went on to overwhelm crypto lender Voyager Digital Holdings Inc., hedge fund Three Arrows Capital, and others across the industry, costing investors billions of dollars.
Celsius became embroiled in an increasing number of controversies under Mashinsky’s leadership. The company froze user withdrawals in June due to liquidity issues, was sued in July for being a “Ponzi scheme,” and disclosed a $1.19 billion deficit in its bankruptcy filing later that month. Celsius, along with Gemini Trust Co. and Voyager, faced scrutiny from the US Securities and Exchange Commission earlier this year over whether products that pay interest on crypto deposits should be registered as securities.
Mashinsky joins a growing list of cryptocurrency executives who have left their positions or made plans to leave during the current bear market. Kraken’s frequently contentious co-founder Jesse Powell made the decision to step down from his position as CEO and take on the role of chairman last week. Sam Trabucco, co-CEO of Alameda Research, and Michael Moro, CEO of the cryptocurrency brokerage Genesis, resigned from their positions in August.
The longtime CEO of MicroStrategy Inc., Michael Saylor, resigned after the software developer and Bitcoin investor disclosed a more than $1 billion quarterly loss resulting from the sharp decline in the value of the cryptocurrency.
Also on Tuesday, Brett Harrison, the president of the cryptocurrency exchange FTX US, disclosed his own plans to retire.
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