While the Celsius platform is bankrupt, we learn that its CEO Alex Mashinsky would have taken over trading activities in January. Meanwhile, a legal document reveals a loss of $2.84 billion in the balance sheet of cryptocurrencies under management.
Alex Mashinsky ran Celsius’ trading strategy before bankruptcy
According to a Financial Times investigation, Alex Mashinsky, the CEO of Celsiushad taken over the trading operations of the company several months before bankruptcy. The facts date back to January when Alex Mashinsky feared that the US Federal Reserve (FED) would lower its key rates.
He would have felt that such a decision would have had a negative impact on the market and therefore sold large amounts of bitcoins despite the advice of its traders.
Celsius had $22 billion worth of cryptocurrencies under management at that time. The next day, the company would have bought back these same BTCs, but this time at a loss. In January, Celsius recorded a loss of $50 million, although not everything is necessarily attributable to its CEO.
However, according to Celsius’s lawyers, the company’s bankruptcy could not be attributed to poor management by Alex Mashinsky, but rather to the unfavorable conditions what the crypto market is going through.
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Liquidity on the verge of drying up
Last Sunday, the law firm Kirkland & Ellis published a document celsius financial statement to July 29. According to a forecast table, the company’s cash position, amounting to 137 million dollars, should end up negative by nearly 34 million as of October :
Figure 1: Celsius cash flow forecast
Worse still, the company’s assets and liabilities table shows the full extent of the situation. For example, while Celsius owes 104,962 BTC to its clients, it only owns 14,578, which leaves a hole in the accounts of 2.15 billion dollars to July 29.
In total, the balance of all these assets and liabilities represents a loss of $2.84 billion and there is no guarantee that platform customers will be able to see them again one day:
Figure 2: Celsius Assets and Liabilities as of July 29
The document also discusses mining revenues. With 58,000 machines deployed, 432.3 bitcoins were mined and 128.61 sold by July 13. It could therefore represent a approximate revenue of $2.6 millionwhich will not be able to make up for the losses.
Thus, this case is far from over and leaves, again and again, Celsius customers in uncertainty.
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Sources: Financial Times, Legal Documents
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