Employee holding a box with resignation letter on top

Alex Mashinsky resigns from Celsius Network

Effective immediately, Alex Mashinsky will resign as chief executive officer of Celsius Network.

The letter of resignation came today after months of misleading statements and obfuscation. Mashinsky obscured the facts and attempted to play down the seriousness of the situation at his firm. Just a day before the company’s implosion and the announcement that it would suspend withdrawals, Mashinsky had taken to Twitter to challenge a critic to find a single instance of a withdrawal denial.

Today, after months of obfuscation, Mashinsky decided to disappear from public view while maintaining his directorship at the company he founded.

“Effective immediately, please accept my resignation as CEO of Celsius Network Ltd, as well as my directorships and other positions at each of its direct and indirect subsidiaries, with the exception of my director position at Celsius Network Ltd. I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing,” he stated.

What suddenly changed for Alex Mashinsky?

While it’s impossible to say for sure right now, something has changed to force the Celsius founder from his position. Given the situation unfolding, it’s improbable that Mashinsky is doing this as a moral obligation or “right thing to do.” If his actions over the last few months have shown us anything, it’s that self-interest is priority number one in camp Mashinsky.

Is it possible that the international arrest warrant for Terraform Labs Founder Do Kwon spooked Mashinsky and signaled that he should fade to black ASAP? Again, it would be mere speculation to say so, but it’s certainly coincidental timing.

Why now, after months of holding on even after he brought his firm into financial oblivion, leaving loyal customers holding the bag for approximately $4.7 billion, did Mashinsky decide to step down? We’ll have to wait to find out, but I have a sneaking suspicion we won’t have to wait too long.

What happened to Celsius Network?

For those who don’t know, Celsius Network was one of the most popular digital currency lending platforms. It offered depositors higher yields than banks offered to deposit their coins which would then be lent out to borrowers.

In June, Celsius imploded in spectacular fashion. In a series of events that would lead to the implosion of the entire digital currency market, including the folding of Three Arrows Capital and the closure of some other lending platforms, Celsius froze withdrawals without any real warning.

Soon after, the firm announced that it was insolvent and filed for Chapter 11 bankruptcy, a move that allowed it to hold onto depositors remaining funds while it tried to work out a plan to salvage something from the mess.

Since then, many have wondered if Celsius Network was a classic Ponzi scheme all along. A Vermont regulator even said so outright.

Earlier in September, a bankruptcy court in Manhattan announced it was looking closer at Celsius’ actions and finances after a Department of Justice request for an independent investigation.

Whether Mashinsky’s resignation is, in any way, linked to the probe is unknown at this time. However, one thing is certain; Celsius Network customers still have not been made whole, and they have little hope of getting their funds back anytime soon.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple,
EthereumFTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.