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Celsius Network has seen months of turmoil as the company halted operations, was hit with lawsuits and filed for bankruptcy in the United States. Now, its CEO and founder Alex Mashinsky submitted his letter of resignation, according to a press release.
The resignation will be enforced “effective immediately”, and the Celsius Network CEO will also abandon his position within the company’s “direct and indirect subsidiaries. Mashinsky will continue working as director of Celsius Network Ltd.
In the future, the executive claims that he will focus his attention on “working with the community” and come up with a plan to provide the best results for its creditors. The company filed for bankruptcy in July 2022, and since then has been working on a plan to resume operations.
Mashinsky claims that the community will benefit from “staying united” around the financial recovery plan, saying that he will work with the company to “achieve a successful reorganization”. In his letter of resignation, the executive said:
I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing. Since the pause, I have worked tirelessly to help the Company and its advisors put forward a viable plan for the Company to return coins to creditors in the fairest and most efficient way. I am committed to helping the Company continue to flesh out and promote that plan, in order to help account holders, become whole.
Will The Community Stand Behind Celsius Network?
The process of making customer whole has been surrounded by controversy as the company’s financial restructuring plan has been put into question by its clients. As Bitcoinist reported, Celsius Network’s bankruptcy lawyers have stated that users “relinquished their legal right to their funds”.
These seemingly obscure terms of service might allegedly authorize the transfer of ownership from the Celsius Network users to this platform once a deposit is confirmed. These terms of service apply to the popular Earn and Borrow accounts and allegedly allowed Celsius to sell, use, pledge, and more with its clients’ funds.
This term of service has been brought in a lawsuit filed by KeyFi’s Jason Stone, a company that was hired to trade with Celsius Network funds to generate the yield to be paid to its customers. In a document filed in the Supreme Court of the State of New York, KeyFi accused Celsius and Alex Mashinsky of running a “Ponzi Scheme” and a:
(…) lack basic security controls to protect the billions of dollars in customers’ funds they held, but that they were actively using customer funds to manipulate crypto-asset markets to their benefit.
Remains to be seen if Manshinky’s decision will bring benefits to the hundreds of clients affected by Celsius’ financial hurdles. At the time of writing, the company’s native token CEL trades at $1.38 with a 5% loss on the 4-hour chart.