Celsius Lost Over 0M in Grayscale Bitcoin Confidence Trading: Financial Times Report

Celsius Lost Over $100M in Grayscale Bitcoin Confidence Trading: Financial Times Report


  • Celsius CEO Alex Mashinsky took over the company’s business strategy in January 2022.
  • Mashinsky took a more active role in trade decisions ahead of the FOMC meeting earlier in the year.
  • The report explained that Mashinsky was “hitting large amounts of bitcoin.”
  • The Financial Times also reported that the crypto lender was facing insolvency since March 2022.
  • Ripple has hinted at an interest in acquiring the bankrupt crypto firm, according to reports.

Alex Mashinsky, the CEO of bankrupt crypto lender Celsius, took direct management of the company’s business strategy shortly before a US Federal Reserve meeting held in January 2022 when Mashinsky moved to allegedly protect the company of new falls in the crypto market.

According to a report in the Financial Times on Tuesday, Mashinsky’s plan failed as the crypto lender suffered massive losses and eventually filed for bankruptcy in July after withdrawals on the platform stopped in June, as reported by EthereumWorldNews.

The report cited information from people familiar with the matter and revealed that Mashinsky vetoed business decisions against the advice of Celsius financial experts. An example of this, according to the report, happened before the FOMC meeting in January.

At the time, the CEO ordered Celsius traders to sell hundreds of millions worth of Bitcoin before the feds announced their decision. The company bought back its BTC at a loss nearly a day later, according to the FT report.

In January 2022, the crypto lender reported $50 million in trading losses. However, it is not clear whether the full weight of the losses was the result of Mashinsky’s decisions.

Mashinsky’s GBTC early insolvency and trading signs for Celsius

News on Tuesday revealed that Celsius was facing insolvency as early as March 2022. The report also revealed that Mashinsky halted a GBTC deal that ultimately lost the company more than $100 million.

As of September 2021, the crypto lender had some 11 million tokens on the Grayscale Bitcoin Trust purchased at a premium. Grayscale provides the largest BTC fund with a tradable digital asset offering that tracks Bitcoin.

Grayscale is reportedly offering the cryptocurrency lender an option to exit its GBTC position in September after the company’s $400 million worth of BTC trades at a 15% discount. However, Mashinsky rejected the option in the hope that the discount margin would be reduced.

Later in April 2022, the crypto lender finally closed out his GBTC position at 25% off.

What’s next for the crypto lender and its CEO

At press time, Celsius is facing liquidation as creditors seek legal recovery of its assets. Restructuring plans are also underway as investigations into the company’s internal operations are launched. The Financial Times said that investigators are looking into Mashinsky’s decisions that led to the bankruptcy of the cryptocurrency lender.

Furthermore, EWN reported that Ripple might be interested in acquiring the company’s assets.

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