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Alex Mashinsky, former CEO of the defunct crypto lender Celsius was hoping to get $1 billion to rebrand the firm. According to the story from persons familiar with the issue, Mashinsky intends to create a new project branded Celsius Web Service (CWS) with $1 billion.
Notably, the new project which is aimed at focusing on Yield and Custody was pitched to Goldman Sachs and Abu Dhabi-backed fund ADQ in May and June, respectively before filing for bankruptcy protection in Mid-July.
Additionally, Mashinsky also pitched the project to his Board, which up until June of last year featured Laurence Tosi and a representative of Canadian Caisse de Depot et Placement du Quebec. Interestingly, these investors jointly spent $750 million in Celsius in 2021 but had no interest in CWS.
Interestingly, a Goldman presentation published in May 2022 revealed that Celsius planned to investigate how it could collaborate with the bank to increase its involvement in the cryptocurrency market.
Did Mashinsky’s Project Come Late?
It appears that Mahinsky’s attempt to steer the company away from its primary activity of lending out crypto assets was too little, too late. Celsius eventually filed for bankruptcy in July, after persistent efforts to repay its loans. This happened a month after Celsius Celsius froze withdrawals, owing over $4.7 billion to more than 100,000 users.
As the pressure increased on Celsius in May, Mashinsky wanted to transfer his focus to the CWS project, according to the source. It was a strategy that startled some in the industry, given that Celsius had recently received $750 million from external investors, they claimed.
However, the cash had already been depleted at that point. “The reality is that no one had any idea how bad things were at the time,” the source stated.
In response to requests for comment on the CWS project, Mashinsky offered a link to a blog post detailing the “true story” of Celsius’s collapse, implying that Alameda Research, a subsidiary firm of the defunct FTX, was the cause of Celsius’ demise.
This response is, however, contrary to opinions from Celsius employees, citing mismanagement for the company’s failure.
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