NewsBusiness

Co-Founder of Bankrupt Crypto Firm Celsius Daniel Leon Resigns: Report

Another executive of the bankrupt crypto lending firm Celsius has stepped down after a slew of financial and legal issues.

2 min read
Resignations and layoffs are common during bear markets. Image: Shutterstock.

Co-founder of the troubled crypto lender Celsius Daniel Leon has stepped down from his role as chief strategy officer, according to Bloomberg

Celsius, a now-defunct crypto lending firm, confirmed the information on Tuesday, saying that Leon was “no longer part of the organization.”

On September 27, co-founder and CEO Alex Mashinsky also resigned, noting how he had become a “distraction” to the company and any additional work to recover what is left of the battered crypto lending platform.

A week after his resignation, it was uncovered that the former CEO had withdrawn $10 million from the company’s account in May, weeks before the platform halted user withdrawals. A source told the Financial Times that this came after having taken out that same amount during the nine months prior. 

Leon owns 32,600 shares of Celsius stock, acquired in February 2018. It is still unclear what will happen to his dividends. 

Decrypt reached out to Celsius for comments but did receive a reply at the time of publication. 

The downfall of Celsius 

What was once a leading crypto lender turned sour, leaving behind billions in debt and customers wondering if they’ll ever get their money back.  

In June, the platform halted withdrawals, stating that it was “taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets.”

Weeks later, Celsius filed for Chapter 11 bankruptcy, which revealed the $5 billion debt to investors and a $1.2 billion hole in the firm’s balance sheet. 

For regulators in Vermont, this came as no surprise. Officials said that Celsius had been insolvent at least since 2019. The regulators said that hundreds of millions of dollars pushed into Celsius’ native token had ‘artificially’ inflated the firm’s token holdings, court documents read.

With the firm entering the latter stages of bankruptcy, an auction will be held for its remaining assets. The final bid deadline is slated for October 17, with the bankruptcy court’s filing indicating a long list of “expected” bidders.

Stay on top of crypto news, get daily updates in your inbox.