NewsletterCrypto Whistleblower Who Predicted Celsius Downfall Claims Its CEO Lied
According to a crypto investigative journalist, Otterooo, Celsius CEO Alex Mashinsky told a list of lies right before Celsius filed for a Chapter 11 bankruptcy. Citing the Celsius Bankruptcy filings, he revealed that Celsius was already insolvent late in 2021.
Otterooo claimed on June 7 that Celsius would be insolvent by the end of 2022. Soon afterward, the platform paused all user withdrawals and asset swaps on June the 12th citing market conditions.
Bankruptcy Filings Raise Major Questions
On July 13th, Celsius filed for a Chapter 11 bankruptcy, claiming it to be the best path forward to stabilize the business and come out positioned for success in the crypto industry. However, its bankruptcy filings raised many questions about its practices.
According to Wall Street Silver, the company owed its users around $4.7 billion and CEO Mashinsky reported approximately a $1.2 billion hole in its balance sheet. However, Otterooo believes that the hole may be quite a lot more than the provided number. He believes that the $720 million in mining assets claimed by the company’s bankruptcy filings is widely exaggerated.
Moreover, the $600 million worth of $CEL token claimed as an asset has no implicit value, other than to pay the debt that is denominated in $CEL. Celsius also has over nearly $467 million stuck in stETH.
Otterooo also claims that Celsius’ bankruptcy might not be a result of the Terra/LUNA crash but a result of its practices.
Celsius CEO Alleged Lies
According to Otterooo, CEO Alex Mashinsky lied several times regarding its solvency. According to him, the company’s top executives were dumping CEL tokens rather than holding them. A Financial Times report corroborates the evidence.
The company also allegedly lied about its number of customers and assets under management to inflate its prices.
A Market Insider report highlighted that Celsius asked FTX CEO Sam Bankman-Fried for a bailout. SBF reportedly walked away from the deal after looking at the state of the balance sheet.
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