His departure comes almost four months after the crypto lender suddenly suspended withdrawals — leaving thousands of customers locked out of their life savings.
In a statement, Mashinsky said:
“I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors — which is what I have been doing since the company filed for bankruptcy.”
He went on to urge Celsius Network customers to stay united — and said he “remains willing and available to continue to work with the company and their advisors to achieve a successful reorganization.”
In his resignation letter, he expressed regret that his role as CEO “has become an increasing distraction” — and he apologized for the “difficult financial circumstances members of our community are facing.”
Current chief financial officer Chris Ferraro has now been promoted to chief restructuring officer, and will serve as interim CEO.
It’s now emerged that Mashinsky was facing pressure to step down from the official committee of unsecured creditors, representing Celsius users who remain out of pocket.
After an investigation, they concluded that allowing him to remain as CEO “was unacceptable and not in the best interests of the estates, and new executive leadership was required.”
They also indicated that Ferraro is “capable” of overseeing the restructuring — pointing to his decades of experience in commercial banking at JPMorgan Chase.
Mashinsky’s handling of Celsius, and subsequent bankruptcy proceedings, have attracted scrutiny and criticism at times.
Hours before accounts were frozen, he had denied reports that users were having issues withdrawing their funds — and lashed out at “FUD and misinformation.”
At the time of its demise, Celsius Network was offering annual percentage yields of up to 18.63% on crypto, with interest paid weekly.
Critics have stressed that this was unsustainable — and simply too good to be true considering how low normal interest rates were at the time.
In August, Celsius faced a backlash over attempts to rehire former chief financial officer Rod Bolger on a $92,000 a month salary, and was forced to make a U-turn.
Recently, internal meetings were leaked online that suggested Celsius was considering turning its debt into IOU tokens.
Court filings have previously confirmed that 300,000 customers have a balance of more than $100, and Celsius is currently grappling with a $1.2 billion black hole in its finances.
A number of CEOs have resigned in the current bear market — but of course, not all of them have left in similar circumstances.
In other developments, FTX US president Brett Harrison announced he is stepping down from his role.
