The bankruptcy process of the cryptocurrency lender Celsius Network has not yet ended, and just as customers and creditors demand the return of funds, the company’s CEO and co-founder Alex Mashinsky chose to resign amid a wave of criticism, but he still plans to help Celsius ” Achieving a successful reorganization,” and deeply sorry to those users who have run into financial difficulties.
The law firm representing Alex Mashinsky said the CEO, who served more than four years, submitted his resignation to a special committee of the board on Tuesday, effective immediately
Celsius formally filed for bankruptcy protection in July this year, after freezing user withdrawals and transfers for about a month and undergoing a full reorganization under Chapter 11 of the U.S. Bankruptcy Code. But not long ago, a customer released audio files alleging that Celsius may repay investors in the form of “I Owe You” tokens (similar to IOUs).
Three days after the news broke, Alex Mashinsky announced his resignation as the CEO of Celsius, as well as his directorships and other positions in each of Celsius’ direct and indirect subsidiaries, with the exception of his directorship at Celsius.
In his resignation, Alex Mashinsky stated
I regret the distraction of my continued role as CEO, and I am deeply sorry for the financial hardship that members of our community are facing.
Many creditors are now looking to recover their assets , Celsius tried to reopen withdrawals to select customers earlier this month, and a court last week approved a motion to appoint an independent examiner to review Celsius’ business transactions.
The committee representing clients and creditors in Celsius’ bankruptcy proceedings had earlier called for Alex Mashinsky to be removed, according to a new court filing.
The Unsecured Creditors Committee (UCC) is understood to be investigating Celsius and company executives, and after receiving information about the company’s executives, the committee has concluded that keeping Alex Mashinsky as CEO is “unacceptable and Not in the best interests of the bankrupt consortium,” adding that “Celsius needs a new top executive”.
Now with Alex Mashinsky’s resignation, the UCC sees it as a “positive step” in moving the bankruptcy process forward.