Last Updated on August 18, 2022 by Bitfinsider

During the January interest rate hike speculations, Celsius CEO Alex Mashinsky reportedly “took control” of the trading strategy at the cryptocurrency lending company.

In an effort to shield Celsius from expected falls in the cryptocurrency market, Mashinsky reportedly personally oversaw individual trades and disregarded the advice of financial professionals. In one incident, the CEO of Celsius reportedly instructed the selling of Bitcoin (BTC) worth “hundreds of millions of dollars,” repurchasing the coins less than 24 hours later at a loss.

Mashinsky allegedly caused his work relationship with Frank van Etten, the Celsius’s then-chief investment officer, to suffer as a result of his conduct. The two allegedly “clashed often” over trading tactics. The Celsius CEO “had a high conviction of how bad the market could move south,” a source familiar with the situation told the Financial Times, and he encouraged staff to “start cutting risk” in whatever manner they could before the Fed meeting.

The Federal Reserve did not confirm it would be raising rates until March, despite reports at the time suggesting it might do so in January. Following the announcement, the cryptocurrency market was still somewhat volatile, but the prices of key tokens didn’t plummet for another two months, with BTC going below $30,000 in May and then under $20,000 in June.

According to one of the people claimed to be involved with the events at Celsius, Mashinsky was “not running the trading desk”—apparently not taking a heavy hand on trades but rather, he was sharing his ideas on the crypto market to influence strategy. According to another, the CEO of Celsius was “slugging around huge chunks of Bitcoin” and making trade orders based on false information.

According to reports, the CEO of Celsius utilized his power to prevent the sale of shares in Grayscale’s Bitcoin Trust, or GBTC, as well as other investments tied to cryptocurrencies. According to the news source, a solution was offered to reduce Celsius’ losses on GBTC — the company held 11 million shares worth around $400 million in September 2021 — but Mashinsky rejected it, ultimately selling for a loss of between $100 million and 125 million dollars in April 2022.

After paying off obligations owing to Compound, Aave, and Maker, Celsius filed for Chapter 11 bankruptcy in July. According to a source, the company’s debt is closer to $2.8 billion than the $1.2 billion deficit claimed in its bankruptcy petition, which suggests the crypto lending platform will run out of money by October, according to a report published on Tuesday.

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