Celsius CEO Accused of Controlling Trading Scheme and Making Bad Bets

On Tuesday, a new report disclosed that Alex Mashinsky, the Israeli-American chief executive and founder of Celsius Network, was the one behind the trading strategy of the lending platform.

According to several people familiar with the matter, the CEO had sold bitcoin worth millions of dollars in anticipation of buying it for a cheaper price.

However, after the Celsius CEO made this bet, the bitcoin market had gone in the opposite direction, as the leading cryptocurrency managed to record gains in its price.

Bad bets

The Financial Times (FT) published the report on the embattled crypto lending company, Celsius Network.

It disclosed that months before the platform filed for bankruptcy, Mashinsky had decided to take control of their trading strategy.

People with knowledge of the matter said that the CEO had ended up making some bad bets with bitcoin, along with a number of other crypto assets.

One of the individuals quoted in the report said that the top executive had ordered traders to trade the book based on bad information.

The anonymous source said that he was betting huge quantities of bitcoin. But, another source said that while the CEO may have expressed his perspective out loud, he was not behind the trading desk.

Clashes

While the two individuals offered a contrary opinion, other people disclosed that the top official had often had clashes with the company’s CIO.

They said that tensions had arose because Mashinsky would repeatedly involve himself in the trades that Celsius was making.

Another anonymous source mentioned in the August 16th report that the CEO was convinced that the market would move south.

He said that Mashinsky wanted them to cut the risk as much as possible. The accusations around the CEO come as many of the customers of the crypto lending firm wrote letters to bankruptcy court.

These people pleaded with the authorities to give their funds back. Customers revealed that they were suffering from financial difficulties after Celsius had frozen their funds.

They added that they needed their funds back and it was an emergency situation. Many of them shared just how bad things have gotten for them because their funds are locked and inaccessible.

Ripple takes interest

Moreover, a few days ago, a spokesperson for Ripple Labs had disclosed that the distributed ledger company was interested in knowing more about Celsius as well as its assets.

It should be noted that Celsius is just one of the group of companies in the crypto market that have faced difficulties this year, many of which have filed for bankruptcy.

Some of the other companies that have found themselves in trouble include Babel Finance, Hodlnaut, Three Arrows Capital (3AC), Voyager Digital and Vauld.

Not only have they dealt with financial hardships, but have had to turn to financial regulators for assistance, including 3AC and Voyager Digital.

This is because of the crypto winter that appears to be happening in the market, with assets experiencing a drop in prices.

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