June 5, 2023

Celsius was sued by former investment manager Jason Stone on Thursday, as pressure on the firm continues to mount amid plunging cryptocurrency prices. Stone claims that, among other things, Celsius CEO Alex Masinski (above) “is able to enrich himself greatly”.

Piaras Ó Mídheach | Sportsfile for Web Summit | Getty Images

Troubled lending platform Celsius has exited Its motion to bring back former CFO Rod Bolger $92,000 per month, prorated over at least six weeks, According to court documents The lawsuit was filed Friday in the Southern District of New York. The notice of withdrawal came ahead of a hearing review scheduled for Monday.

When Bolger worked full-time as the company’s chief financial officer, original action display In addition to stock and token options, his base salary is $750,000 with performance-based cash bonuses of up to 75% of his base salary, which brings his total earnings range to around $1.3 million. The filing also indicated that Bolger was technically still on the company’s payroll.

“On June 30, 2022, Mr. Bolger notified the debtor that he would terminate his employment voluntarily,” read file“In accordance with his notice of termination and the terms of his employment agreement (as defined below), Mr. Bolger must give eight weeks’ notice to the debtor that he has done so and that he will remain an employee of the company. The debtor.”

If the motion is approved, it is unclear whether Bolger might receive $62,500 (his monthly base salary) in compensation in addition to the $92,000 per month in consulting fees that Celsius is asking for. The filing said he would remain a Celsius employee, but also noted Bolger was “not entitled to any severance pay.”

CNBC reached out to Celsius to inquire about the terms of the proposed motion, but did not immediately receive a response to our after-hours request for comment.

The decision to dismiss the motion comes three days after CNBC first reported a request for Bolger’s help in the bankruptcy process.it also follows a Formal objection submitted CPA and Celsius investor Keith Suckno challenged Celsius’ move, claiming “very little detail” on why Bolger’s services were necessary for bankruptcy proceedings.

in the original motionCelsius said it needed Bolger as an advisor to help it navigate bankruptcy proceedings “because Mr. Bolger is familiar with the debtor’s business.” It went on to say that during Bolger’s tenure, he led efforts to stabilize the business amid volatile market volatility this year. , directed the financial aspects of the business and served as a leader of the company.

Bolger Former CFO of Royal Bank of Canada and Bank of Americapreviously worked at Celsius for five months before resigning on June 30, about three weeks after the platform suspended all withdrawals.

Bolger’s last days in Celsius

When Suckno objected to having Bolger re-direct bankruptcy proceedings, he claimed that Bolger made a “Get to know Rod Bolger, CFO of Celsius,” The platform issued five days before the platform froze withdrawals due to “extreme market conditions.”

In the article, which CNBC also reviewed, Bolger said in a print interview that Celsius’ “robust liquidity framework, established practices and modeling around liquidity data” is similar to that of other large financial institutions.

“This puts us in a strong position to weather the recent market turmoil and ensure that clients who need access to their digital assets have free and clear access to them,” Continuing Bolger’s quote in Celsius blog post. The following Monday, the platform stopped all withdrawals and transfers.

Meanwhile, two days after that blog post — three days before Celsius froze customer funds on the platform — Bolger appears on Celsius’ weekly YouTube show Ask Me Anythingin which he said companies welcome regulation.

“We believe in transparency. Blockchain is about transparency. We are transparent. You know, my goal is to have us regulated everywhere,” Bolger said in the video.

“We voluntarily disclose a lot of financial information. My goal – even before we are regulated and/or public and required to do so – is to continue building these tools Similar to Basel…These are the standards that banks basically follow,” Bolger continued, adding that Celsius is already assessing market risk and operational risk so they can “continue to build a level of trust in the community.”

The video was posted on Friday, June 10, and the following Monday, June 13, Celsius closed its access to user funds in and out. Celsius owes its users about $4.7 billion, According to its bankruptcy filing.

CNBC sent Bolger multiple requests on two different platforms but did not immediately respond to comment.

Following Bolger’s resignation as CFO, Celsius subsequently appointed Chris Ferraro, then head of Financial Planning, Analysis and Investor Relations at Celsius. Within days of his appointment, the company filed for bankruptcy protection.

Once a giant in the crypto lending world, Celsius is now facing claims it is running a Ponzi scheme to pay early depositors with money it gets from new users.

At its peak in October 2021, CEO Alex Mashinsky said, Crypto lender manages $25 billion in assets. Now, Celsius drops to $167 million in “cash on hand” It said this would provide “sufficient liquidity” to support operations during the restructuring.

The filing also shows that Celsius has more than 100,000 creditors, some of whom lent the platform cash to back the arrangement without any collateral. Its list of top 50 unsecured creditors includes Sam Bankman-Fried’s trading firm, Alameda Research.

Retail investors have petitioned judges to help them recover some of their lost assets, with some saying their life savings has effectively been spent.

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