Traditionally, we'll start with an explanation. Celsius was one of the companies which did not survive the current bear market. The platform as a whole faced a liquidity crisis amid the detachment of the stETH exchange rate from the regular ether. As a result, the company closed its withdrawals to users and lost their trust. However, such blockages usually become a red line for users, who then avoid interacting with such platforms.


And although the blocking of the withdrawals took place back in June, the company was again at the centre of criticism a week ago. The fact is that the platform’s already-mentioned head Alex Maszynski conducted transactions with his address the previous day, and did so for the first time since May 2022.

Celsius chief Alex Maszynski’s wallet activity

He then exchanged 17,475 CELs for the equivalent of $28,242 in ETH through the decentralised exchange Uniswap. CEL, in turn, is a native token of the Celsius platform. That is, as long as users cannot withdraw their coins from the platform, its chief executive considers it acceptable to dispose of a sufficiently large volume of its native tokens.

Alex Maszynski’s CEL sales transactions

Naturally, some users of the platform took such a thing as an insult. Especially since withdrawals, exchanges and coin transfers on Celsius have been disabled until today. Here’s the relevant notice on the company’s website.

Notification of blocked withdrawals and transfers on Celsius’ page at the top of the website

Why did Celsius go bankrupt?

After the US Federal Reserve meeting in January 2022, Celsius CEO Alex Maszynski allegedly took charge of the company’s trading strategy. Convinced that the price of BTC would collapse, he ordered a team of traders to sell hundreds of millions of dollars worth of bitcoins. Maszynski also failed to consult internal financial experts and did not pay due attention to assessing Celsius’ reserves, The Block reported.

Celsius CEO Alex Mashinsky

This was shared by one of the platform’s traders in an interview on condition of anonymity. Here’s his quote, published by news outlet CryptoSlate.

He [Mashinsky – editor’s note] was ordering traders to trade based on unverified information. He was selling large volumes of Bitcoin.

As a result, the US Federal Reserve did announce the dire situation in the economy at the beginning of the year, but did not raise the benchmark lending rate as the Celsius executive had expected. He originally announced his order to sell reserves at a meeting of the trading team on 21 January – the day before the US Fed meeting. Because the rate was not raised, traders were forced to buy back sold BTC just one day after the meeting. According to preliminary estimates, this resulted in a loss of around $50 million in a very short period of time.

The day on the Bitcoin chart when Maszynski allegedly ordered the sale of BTC

Overall, Maszynski's approach to running the company was autocratic. He did not consider the opinions of other members of the platform's management, which caused the executive to have constant conflicts with the company's head of investments, Frank van Etten. Eventually, Etten left the company in February this year, just four months after he took up his post.

Frank van Etten’s work experience on LinkedIn includes information on Celsius

According to other sources, Maszynski was not directly involved in the deals. But that’s not all that important, as he also allegedly blocked the sale of $400 million worth of Bitcoin trust units to Grayscale under the ticker symbol GBTC. At the time, GBTC was trading at a 15 per cent discount to the market price of Bitcoin. Eventually, Maszynski deemed the discount too high and ordered the asset to be “held”.

In the following months, however, the discount rose above 30 per cent. Celsius eventually sold GBTC, but at a discount of 25%, which was much cheaper than if the company had not cancelled the sale. That deal, too, resulted in a loss of more than $100 million.

The platform tried to remedy the situation by borrowing from other cryptocurrency companies, pledging tokens at its disposal as collateral for steblecoin loans, in the process leaving Celsius vulnerable to cryptocurrency price fluctuations. After a while, market volatility increased and Celsius’ financial position finally collapsed into bankruptcy.

Celsius (CEL) native token price in the last 7 days

Alex Maszynski himself and Celsius officials have so far declined to comment on this information. The company is currently involved in litigation over its own bankruptcy case.


We believe that this situation confirms that the negligence of even one important person in the centralized management structure can lead to a catastrophe. In fact, that's why there is a lot of news about bankruptcy of not only Celsius, but also other cryptocurrencies like Three Arrows Capital and Voyager Digital. I would like to believe that this situation will be a lesson for other CEOs who suddenly want to do things that are not their own.