Why Celsius Co-Founder Daniel Leo Resigned
The co-founder and strategy head of bankrupt crypto lending firm Celsius, Daniel Leon, has resigned. His resignation was a result of the current situation, and financial and legal issues facing the company. According to a Bloomberg report, Leon stepped down from his role as chief strategy officer on Tuesday, and he is the second executive to take an exit from the company management position. Leon’s exit from the company happened just a week after the former CEO of Celsius, Alex Mashinsky, resigned.
Why Would the Celsius Founder Resign at this Critical Time?
Celsius has been in a lot of trouble lately, which led to the resignation of CEO Mashinsky on September 27. A week after his resignation, it was revealed that he had withdrawn $10 million from the company’s account in May. In June, the platform halted the customers’ withdrawal requests stating it was taking this action for the benefit of the entire community, to stabilize liquidity and preserve and protect assets. Leon is stepping down amid Celsius’ ongoing bankruptcy proceedings.
Issues Surrounding Celsius
In July, Celsius filed for Chapter 11 bankruptcy, revealing $15 billion debt to investors and a $1.2 billion hole in the firm’s balance sheet. Now, it faces an inquiry from an investigator appointed by the US Trustee’s office authorized by the bankruptcy court for the Southern District of New York.
According to the US’s Trustee Office and some Celsius creditors, the firm has been reluctant to settle issues concerning its present financial situation. Some regulatory officials also claimed Celsius has been bankrupt since 2019. And hundreds of millions of dollars pushed into the Celsius token had artificially inflated the firm’s token holding as stated in the court documents. The inquiry is intended to investigate these claims.
Celsius’s billion-dollar debt left customers wondering if they will ever get back their money. The firm entering the latter stage of bankruptcy means an auction will be held for its remaining assets. The final bid deadline will be on October 17. The bankruptcy court’s filing indicates a long list of expected bidders.
Leon owns 32,600 shares of Celsius stock acquired in February 2018 still it’s not yet clear what will happen to these stocks.