S. Daniel Leon, co-founder and chief strategy officer of the cryptocurrency lender Celsius Network, quit on Tuesday, based on sources with knowledge of the situation and an internal memo obtained by CNBC. After the now-retired CEO Alex Mashinsky, he is the most recent official to leave the organization. According to the email, Lior Koren, who was once the firm’s worldwide tax director, will take over and work out of Israel. Leon’s retirement was verified by Celsius in an email to CNBC.
The Captain Is Jumping Sinking Ship
According to the Financial Times, Leon is leaving amidst Celsius’s continuing bankruptcy trial. Mashinsky left his position roughly one week ago. Inquiries are being conducted by an inspector chosen by the U.S. Trustee’s office and approved by the Bankruptcy Court for the Southern District of New York after Celsius filed for bankruptcy in New York in July.
YouTuber Tiffany Fong suggested Leon’s departure when she posted recordings from two stolen all-hands sessions at the business. In one, Mashinsky and other officials put forth the “Kelvin” rehabilitation plan, which emphasized ownership. Nuke Goldstein, the company’s co-founder, and CTO suggested that Celsius produce ‘IOU’ tokens for its clients.
According to the U.S. Trustee’s office and several Celsius creditors, the corporation has not been entirely transparent about its financial status. These complaints are the subject of the investigation.
The Financial Times revealed earlier this month that Mashinsky took out nearly $10 million in cryptocurrency from the business in May, a few weeks before Celsius stopped letting customers withdraw money and just over a month before it applied for Chapter 11 bankruptcy protection.
In June, Celsius, situated in Hoboken, New Jersey, gained attention for freezing account holders amid the infamous crypto winter and industry-wide severe recession.
Celsius was one of the biggest exchanges for cryptocurrency lending before the freeze, with far more than $8 billion in client loans and close to $12 billion in holdings managed. The company had lured 1.7 million clients by promising up to 17% returns on cryptocurrency deposits.
Invisibly, Celsius would lend client money to hedge funds and other investors prepared to offer even more significant returns. According to internal documents provided to CNBC, it has invested in other high-risk cryptocurrency companies.
Other Exchanges’ Executives in Complete Disarray
As the crypto winter drags on, Leon joins a continuous stream of CEOs leaving the industry. Some executives, including the former Head of MicroStrategy Michael Saylor, the CEO of Kraken Jesse Powell, the president of FTX US Brett Harrison, the CEO of Genesis Michael Moro, and managing director Matthew Ballensweig, have transitioned into less public advisory roles.
Some, like previous Alameda Research co-CEO Sam Trabucco, Ignite CEO Peng Zhong, and bankrupt Voyager Digital CFO Ashwin Prithipaul, have entirely altered routes.