Celsius Network is facing renewed scrutiny after a report alleged that founder and former CEO Alex Mashinsky took direct control of the company’s trading strategy in the months leading up to its bankruptcy filing. Citing multiple people familiar with the matter, the report said Mashinsky made a series of high-stakes decisions involving bitcoin and other crypto assets.
According to the report, Mashinsky sold millions of dollars worth of bitcoin in anticipation of buying it back at lower prices. But the market did not follow that script. Instead of falling further, bitcoin moved higher, leaving the company exposed to the consequences of a mistimed call. One source described the trading approach as being driven by “bad information,” claiming traders were instructed to make large shifts based on flawed market assumptions.
Dispute Over How Much Control He Had
The extent of Mashinsky’s operational role in trading remains contested. Some people familiar with the situation said he repeatedly inserted himself into specific trades and clashed with Celsius’s former chief investment officer over risk and positioning. Another source, however, argued that while Mashinsky voiced strong views, he was not formally running the trading desk.
Even so, the report portrays a leadership team under pressure as market conditions deteriorated. One person cited said Mashinsky had a strong conviction that the market could move sharply lower and wanted Celsius to reduce risk wherever possible. In hindsight, that defensive positioning appears to have been poorly timed as bitcoin later gained ground instead of extending losses.
Customer Fallout and Broader Industry Stress
The allegations come as Celsius customers continue to seek relief through bankruptcy proceedings. Users have submitted letters to the court describing severe financial hardship after the platform froze withdrawals, with some saying their deposits represented savings meant for basic living expenses or long-term security.
Interest in Celsius’s remaining assets has also drawn attention. A Ripple Labs spokesperson previously told Reuters that the company was interested in learning more about Celsius and its assets. Celsius was one of several crypto firms that ran into major financial trouble in 2022, alongside Voyager Digital, Babel Finance, Three Arrows Capital, Hodlnaut, and Vauld. Many of those cases ended up in courtrooms or under regulatory review as the sector dealt with insolvency and liquidity stress.
Based on the current reporting, questions around who controlled Celsius’s trading decisions and how those calls were made are likely to remain central to the broader assessment of what drove the company into crisis.