The chief executive officer (CEO) of Celsius Network has resigned amid ongoing bankruptcy proceedings involving the cryptocurrency lender.
Alex Mashinsky submitted a letter of resignation two months after Celsius filed for Chapter 11 bankruptcy protection from its creditors.
Mashinsky’s resignation is effective immediately, but he said in a news release that he will continue to help the company provide creditors with the “best outcome” in bankruptcy court.
After the resignation was made public, the company’s cryptocurrency, called the “CEL token,” declined more than 7%.
As recently as May of this year, Celsius was one of the largest cryptocurrency lenders with more than $8 billion U.S. in loans and $12 billion U.S. in assets under management.
The company had a practice of lending out customers’ cryptocurrency holdings to counterparties willing to pay high interest rates to borrow it.
But the business model crashed during an industry wide liquidity crunch in June that resulted in Celsius pausing withdrawals. Shortly afterwards, Celsius filed for bankruptcy protection.
Since the bankruptcy filing, several employees have come forward to talk about excessive risk-taking, disorganization, and market manipulation within the company.
Celsius’ Chief Financial Officer (CFO) Chris Ferraro will serve as the new CEO on an interim basis, the company said.
