Daniel Leon, the co-founder of the troubled cryptocurrency lender Celsius, has handed in his resignation merely a week after CEO and co-founder Alex Mashinsky stepped down from the firm according to reports from Bloomberg.
Daniel Leon, the man who co-founded Celsius along with former CEO Alex Mashinsky has also stepped down from the bankrupt crypto lender as its chief strategy officer. The news was initially reported by CNBC citing unnamed sources and an internal memo but was later confirmed by Bloomberg. The now-defunct Celsius confirmed the information, saying that Leon was “no longer part of the organisation.” Celsius’ co-founder and CEO Alex Mashinsky stepped down on September 27 saying that he had become a “distraction” to the company. News broke earlier this week that Mashinsky had withdrawn $10 million from the company’s account in May, just weeks before the platform halted customer withdrawals. A source for the Financial Times said that this came after he had taken out the same amount during the nine months prior.
Daniel Leon owns 32,600 Celsius shares and filed in a U.S. bankruptcy court to have his shares of the company declared worthless on September 5. It remains unclear what will happen to his dividends.
Celsius’ Liquidity Crisis
Celsius was once a leading cryptocurrency lender but turned sour leaving in its wake billions in debt and customers wondering if they will ever see their money again. The firm halted customer withdrawals in June stating it was “taking the 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.” Only a month after pausing customer withdrawals, the stricken yield platform filed for Chapter 11 bankruptcy. In a desperate attempt to generate liquidity to continue its daily operations, the firm applied to the court for authorization to sell its stablecoin holdings. A hearing is scheduled for October 6 to discuss the proposed sale.
Executives Fall Under The Fire of The Crypto Winter
Leon joins a host of executives to have departed the crypto sector amid the ongoing bear market. Executives including CEO of MicroStrategy, Michael Saylor, Kraken CEO Jesse Powel, FTX U.S. president Brett Harrison, and Genesis CEO Michael Moro have all stepped down to less visible advisory roles. Other executives such as former Alameda Research co-CEO Sam Trabucco, Ignite CEO Peng Zhong, and Voyager Digital’s chief financial officer Ashwin Prithipaul have pivoted into completely different roles.