Alex Mashinsky, Celsius founder feeling the heat

Alex Mashinsky, the founder of crypto lender Celsius, has built a cult following by tapping public mistrust in mainstream financial institutions.

Launched five years ago, Celsius, which offers clients high interest rates on crypto deposits, has drawn in 1.7mn customers under the slogan “#unbank yourself”.

Now the company itself faces a crisis of trust after its move on Monday to block customers from withdrawing funds, citing “extreme market conditions” following a wave of outflows and losses on risky trades.

Only three days earlier, during his weekly hour-long YouTube broadcast to customers, Mashinsky had been in typically pugnacious form, dismissing critics who were warning of an impending liquidity crisis.

“All these naysayers and haters haven’t built anything,” Mashinsky told clients, whom he calls Celsians. “Celsius has billions in liquidity, and we provide immediate access to anyone who needs access to it.”

His failure to deliver on this promise has left Mashinsky fighting for the company’s survival and his customers fearing huge losses.

John, a commercial real estate broker from Philadelphia who declined to give his last name, started to pull his money from Celsius last weekend but still has $150,000 trapped. “It’s definitely a let-down,” he said. “I probably didn’t look into him as much as maybe I should have.” 

Mashinsky tweeted on Wednesday that “this is a difficult moment” and that his team was “working nonstop”. 

Celsius marketing has cast Mashinsky, known for his signature “Banks are not your friends” T-shirt, as a Robin Hood figure and self-help guru who will help customers achieve “financial freedom”. He has criticised rival crypto groups such as Coinbase for returning more money to Wall Street investors than to their customers, and his personal website includes a tab on “failed ventures”, offering up the lesson he learned as a “maverick investor and entrepreneur”.

One regret is the fate…

Read more at www.ft.com

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