Insolvent crypto lending platform, Celsius’s senior executives unleashed a shocking fact that the company had internal conflicts for years even before it filed for bankruptcy.
This claim from Celsius’s senior authority members is completely opposite to the firm’s claims that its demise was triggered from the downfall in the crypto.
Senior executives stated that Celsius had an absence of risk management and unorganized operations.
The document shared with CNBC implies that Celsius would invest in high-risk crypto projects and borrow money into hedge funds to gain higher yields. After getting immersive yields from investment, it would share the profits with its customers.
Unfortunately, this move was turned into a complete failure due to the bloodbath in crypto that sparked from Terra’s downfall. Also, the buzz about the hike in interest rates by the Federal had disrupted the crypto market.
“The biggest issue was a failure of risk management. I think Celsius had a good idea, they were providing a service that people really needed, but they weren’t managing risk very well,” Timothy Cradle, Celsius’ former director of financial crimes compliance, said in an interview with CNBC.
However, this is not the first time that a Celsius employee was counting the firm’s dark aspects. Formerly, Celsius’s ex-money manager filed a lawsuit against Celsius under the allegation of fraud, lack of proper risk management, and market manipulation.
Apart from this, he revealed that the company also failed to invest under the line of compliance. He stated that the compliance team has a scarcity of adequate resources to function properly.
Another big claim that the former Celsius director put in place is CEL token market manipulation. Cradle allegedly said that Celsius manipulated CEL token’s price by “actively trading and increasing the price” of the asset.
Celsius’s executives also tried to pump up tokens, whose open talks were heard at the 2019 Christmas party.
“They weren’t shy about it. They were absolutely trading the token to manipulate the price. It came up in two completely different conversations for two completely different reasons,” he said.
One more anonymous employee of Celsius unveiled that its CEO, Alex Mashinsky was hiddenly selling his tokens at the same time when the company was incentivizing customers.
