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Bankrupt crypto lending platform Celsius withdraws motion to hire CFO back at $92,000 a month

Celsius on Thursday was sued by former investment manager Jason Stone, as pressure continues to mount on the firm amid a crash in cryptocurrency prices. Stone has alleged, among other things, that Celsius CEO Alex Mashinsky (above) was “able to enrich himself considerably.”
Piaras Ó Mídheach | Sportsfile for Web Summit | Getty Images

Embattled lending platform Celsius has withdrawn its motion to bring back ex-CFO Rod Bolger at $92,000 a month, prorated over a period of at least six weeks, according to a court document filed in the Southern District of New York on Friday. The notice of withdrawal came just ahead of a hearing scheduled for Monday to review it.

While Bolger worked full-time with the company as CFO, the original motion shows that he had a base salary of $750,000 and a performance-based cash bonus of up to 75% of his base, in addition to stock and token options, bringing the top of his total income range to around $1.3 million. The filing also indicated that Bolger is technically still on the company’s payroll.

“On June 30, 2022, Mr. Bolger gave notice to the Debtors that he was voluntarily terminating his employment,” reads the filing. “In accordance with his Termination Notice and the terms of his Employment Agreement (as defined below), Mr. Bolger is required to give the Debtors eight weeks’ notice, which he has done, and he is continuing to serve as an employee of the Debtors.”

Had the motion been approved, it is unclear whether Bolger potentially would have received compensation of $62,500 (his monthly base salary), in addition to the monthly $92,000 consulting fee Celsius had requested. The filing stated that he was continuing to serve as an employee of Celsius, but it also noted that Bolger was “not entitled to any severance payments.”

CNBC reached out to Celsius to ask about the terms of the proposed motion but did not immediately hear back to our request for comment, sent outside business hours.

The decision to dismiss the motion came three days after CNBC first reported on the request to enlist the help of Bolger as a consultant during the bankruptcy process. It also follows a formal objection submitted by Keith Suckno, a CPA and Celsius investor who challenged the move by Celsius, alleging that “little detail” was given for why Bolger’s services were necessary to the bankruptcy proceedings.

In the original motion, Celsius said it needed Bolger to help it navigate the bankruptcy proceedings as an advisor, ”because of Mr. Bolger’s familiarity with the Debtors’ business.” It went on to say that during Bolger’s tenure, he led efforts to steady the business during turbulent market volatility this year, guiding the financial aspects of the business and acting as a leader of the company.

Bolger, a former CFO for Royal Bank of Canada and divisions of Bank of America, was previously with Celsius for five months before resigning on June 30, about three weeks after the platform paused all withdrawals.

Bolger’s final days at Celsius

In Suckno’s objection to bringing Bolger back to guide bankruptcy proceedings, he claimed that Bolger had “misstated the financial condition and liquidity” of Celsius in a company blog post entitled “Get to Know Rod Bolger, Chief Financial Officer, Celsius,” published five days before the platform froze withdrawals due to “extreme market conditions.”

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

“This put us in a strong position to weather the recent market turbulence and ensure that clients who needed to access their digital assets could get them free and clear,” continued Bolger’s quote in the Celsius blog post. The following Monday, the platform halted all withdrawals and transfers.

Meanwhile, two days after that blog post — and three days before Celsius froze customer funds on the platform — Bolger was featured in Celsius’ weekly ask-me-anything show on YouTube, in which he said the company welcomed regulation.

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

“We have voluntarily disclosed a lot of financial information. My goal — even before we’re regulated and/or public and required to do so — is to continue building out the tools that are Basel-like…Those are the standards that basically the banks work under,” continued Bolger, adding that Celsius was already evaluating market risk and operational risk, so that they could “continue to build the level of trust in the community.”

The video was published on Friday, June 10, and the following Monday, June 13, Celsius shut down its on-and-off ramps to user funds. Celsius owes its users around $4.7 billion, according to its bankruptcy filing.

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

After Bolger’s departure from the position of CFO, Celsius subsequently installed Chris Ferraro, then the head of financial planning, analysis, and investor relations for Celsius. Within days of his appointment, the company filed for bankruptcy protection.

Once a titan of the crypto lending world, Celsius now faces claims that it was running a Ponzi scheme by paying early depositors with the money it got from new users.

At its peak in October 2021, CEO Alex Mashinsky said the crypto lender had $25 billion in assets under management. Now, Celsius is down to $167 million “in cash on hand,” which it says will provide “ample liquidity” to support operations during the restructuring process.

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

Retail investors have filed pleas to the judge to help them recover some of their lost holdings, with some saying that their life savings have effectively been wiped out.

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