On Tuesday, Celsius Network said chief executive Alex Mashinsky had decided to step down and the bankrupt cryptocurrency lender had appointed chief financial officer Chris Ferraro as interim chief executive.
Prior to Celsius, Ferraro spent almost 18 years at JPMorgan Chase & Co. Celsius also said that Ferraro will be in charge of the company’s restructuring.
“I regret that my role as CEO has become increasingly distracting, and I sincerely regret the difficult financial circumstances that members of our community are facing,” Mashinsky said in a statement.
Mashinsky, who did not immediately respond to a Reuters request for comment, decided to step down as the company seeks protection from creditors.
In his resignation letter to the board of directors, Mashinsky said he remains committed to helping the company develop and advance a plan to return customer deposits.
Celsius, based in Hoboken, New Jersey, filed for Chapter 11 bankruptcy protection on July 13, a month after freezing withdrawals and transfers for its 1.7 million customers due to “extreme” market conditions, and fixed a $1.19 billion deficit on its balance sheet. .
Cryptocurrency lenders like Celsius have flourished during the COVID-19 pandemic, luring savers with high interest rates and easy access to loans rarely offered by traditional banks. They lent tokens mainly to institutional investors, profiting from the difference.
But the lenders’ business model has come under scrutiny following a sharp sell-off in the cryptocurrency market earlier this year, fueled by the collapse of the major terraUSD and Luna tokens.
Last month, Celsius sued a former investment manager, accusing him of losing or stealing tens of millions of dollars in assets before the cryptocurrency lender went bankrupt.
Rival crypto lender Voyager Digital, which also filed for bankruptcy in July, said on Monday that crypto exchange FTX won a $1.42 billion bid to buy its assets at auction.
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