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Timothy Cradle, Celsius former director of financial crimes compliance, believes that the downfall of Celsius was its inability to manage risk well.
A recent report has disclosed that the co-founder and chief strategy officer of bankrupt crypto lending platform Celsius, S. Daniel Leon has submitted his resignation letter. This means Lior Koren, who was the company’s global tax director, would be taking over. Koren is expected to operate out of Israel.
Leon’s resignation was hinted at by YouTuber Tiffany Fong. Previously, he shared audio from two leaked meetings where executives were proposing recovery plans.
This is a little over a week after the company CEO Alex Mashinsky submitted his resignation letter, months after filing for Chapter 11 bankruptcy protection. In the case of Mashinsky, he pledged to continue to assist the company to provide creditors with the best outcomes. However, it is unsure whether Koren would still be in touch in these troubled times.
“I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing. Since the pause, I have worked tirelessly to help the Company and its advisors put forward a viable plan for the Company to return coins to creditors in the fairest and most efficient way,” wrote Mashinsky.
Celsius was always in the news in June after freezing customers’ funds during the crypto winter and liquidity issues that cut across the industry. Before this, the company had about $12 billion in Asset Under Management and $8 billion in loans to clients. It was the common destination for 1.7 million users as it offered about 17% maximum yield crypto deposits. Documents also revealed that the company lends out customers’ deposits to hedge funds and those willing to pay higher yields. An internal document reveals that Celsius even invested in high-risk crypto projects.
Timothy Cradle, Celsius’ former director of financial crimes compliance, believes that the downfall of Celsius’ was its inability to manage risk well.
“The biggest issue was a failure of risk management. I think Celsius had a good idea, they were providing a service that people needed, but they weren’t managing risk very well,” he said.
Earlier this month, it was reported by the Financial Times that Mashinsky had withdrawn $10 million in crypto from the company in May. This was weeks before Celsius halted customers’ withdrawal.