Crypto firm Celsius to tap ex-CFO to advise on bankruptcy proceedings
- Struggling cryptocurrency company Celsius is looking to rely on the financial expertise of its former chief financial officer Rod Bolger as it progresses through bankruptcy restructuring. The company’s attorneys filed a petition in the U.S. Bankruptcy Court for the Southern District of New York on Monday to retain Bolger as counsel during the proceedings. The court will consider the motion at a hearing scheduled for August 8.
- Bolger served as the company’s chief financial officer for just five months, telling Celsius of his departure on June 30, according to Monday’s motion. The company filed for Chapter 11 bankruptcy in the Southern District on July 13.
- “The debtors recognize that they need the services and expertise of Mr. Bolger as they manage their transition to Chapter 11 and begin to negotiate a way forward,” Celsius attorneys wrote in the motion. . “His institutional knowledge and experience regarding the unique characteristics of cryptocurrency is invaluable.”
Overview of the dive:
Celsius is seeking to use Bolger as an adviser for six weeks, according to the filing, and the former chief financial officer will receive a retainer of approximately US$93,188 (C$120,000) per month for performing advisory duties.
The company’s attorneys cited the need for stability in their motion to bring in Bolger as bankruptcy counsel, noting that after “a tumultuous series of events,” including a crypto downturn and continued the war in Ukraine, “debtors are working earnestly to stabilize their affairs.”
Bolger previously served as Chief Financial Officer of Royal Bank of Canada (RBC) for five years from 2016 before joining Celsius, and held CFO positions for Bank of America and held several senior management positions for Citigroup. Celsius’ current chief financial officer is Chris Ferraro, a 17-year veteran of JPMorgan Chase banking, who took office on July 11.
The RBC alum joined Celsius in February 2022 after the ex-CFO was arrested Yaron Shalem suspected of money laundering, fraud and other crimes by the Israel Police National Fraud Investigation Unit, according to a November 2021 report by cryptocurrency publication CoinDesk. Celsius appeared to address the situation at the time of the arrest in a November 26 tweet. who said an unidentified employee had been suspended. He also said no assets were “misplaced or mishandled” at the time of the arrest.
According to a Financial Times report, Shalem was one of several cryptocurrency figures arrested in Tel Aviv following reports of potential fraud.
The company was one of several cryptocurrency firms that failed following a $2 trillion crash earlier this year, with fellow digital asset company Voyager also filing for chapter bankruptcy. 11 July 5. Celsius is also facing a liquidity crunch, with a gaping $1.2 billion hole on its balance sheet. A July 15 report from Business Insider shows the company has liabilities of $5.5 billion — owing $4.7 billion to its users — with total assets of $4.3 billion.
The company has 1.7 million registered users, according to its July 27 filing, including about 300,000 active users with account balances over $100. Cryptocurrency withdrawals, exchanges and transfers are all currently suspended, according to the Celsius website.