Celsius withdraws motion to rehire CFO for $92,000 per month

Celsius was sued on Thursday by former investment manager Jason Stone as pressure continues to mount on the company amid a crash in cryptocurrency prices. Among other things, Stone has claimed that Celsius CEO Alex Mashinsky (above) “has been able to significantly enrich himself”.

Piaras Midheach | Sports file for Web Summit | Getty Images

Controversial lending platform Celsius has withdrawn his motion to bring back ex-CFO Rod Bolger for $92,000 per month, prorated over at least six weeks, according to a court document filed in New York’s Southern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

While Bolger worked full-time at the company as CFO, the original motion shows that he had a base salary of $750,000 and a performance-related 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 about $1.3 million. The filing also indicated that Bolger is technically still on the company’s payroll.

“On June 30, 2022, Mr. Bolger informed the debtors that he would voluntarily terminate his employment,” reads the file. “Consistent with his notice of termination and the terms of his employment contract (as defined below), Mr. Bolger is required to give the debtors eight weeks notice, which he has done, and he will continue to be employed as an employee of the debtors.”

If the motion had been approved, it’s unclear whether Bolger might have received a $62,500 fee (his monthly base salary) in addition to the $92,000 monthly advisory fee that Celsius had requested. The file stated that he was still employed as a Celsius employee, but it was also noted that Bolger was “not entitled to severance pay”.

CNBC contacted Celsius to inquire about the terms of the proposed motion, but did not immediately respond to our request for comment, which was sent out of business hours.

The decision to reject the motion came three days after CNBC first reported its request to enlist Bolger’s help as an adviser during the bankruptcy process. It also follows a formal objection lodged by Keith Suckno, a CPA and Celsius investor who challenged Celsius’ move, claimed “few details” were given as to why Bolger’s services were needed for the bankruptcy proceeding.

In the original movement, Celsius said it needed Bolger to guide it through the bankruptcy proceedings as an adviser, “due to Mr. Bolger’s familiarity with the accounts receivable cases.” It went on to say that during Bolger’s tenure, he led efforts to stabilize the company amid turbulent market volatility this year, leading the financial aspects of the company and acting as a leader of the company.

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

Bolger’s last days at Celsius

In Suckno’s objection to bringing Bolger back to head the bankruptcy proceedings, he alleged that Bolger “misrepresented Celsius’s financial condition and liquidity” in a company blog post titled “Meet Rod Bolger, Chief Financial Officer, Celsius,” published five days before the platform froze withdrawals due to “extreme market conditions”.

In that post, which was also reviewed by CNBC, Bolger said in a printed interview that Celsius’s “strong liquidity framework, established practices around liquidity data and modeling” were comparable to other major financial institutions.

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

Meanwhile, two days after that blog post — and three days before Celsius froze customers’ money on the platform — Bolger was featured in Celsius’s weekly ask-me-anything show on YouTubein which he said the company welcomes the regulations.

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

“We have voluntarily released a lot of financial information. My goal – even before we are regulated and/or public and obligated to do so – is to continue to build out the tools that Basel-esque… Those are the standards the banks are basically working under,” Bolger continued, adding that Celsius was already evaluating market risk and operational risk so 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 the in- and out-ways to user funds. Celsius owes its users about $4.7 billion, according to his bankruptcy filing.

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

Following Bolger’s departure from the CFO position, Celsius went on to install 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 is now facing claims that it operated a Ponzi scheme by paying early depositors with the money it received from new users.

At his peak in October 2021, CEO Alex Mashinsky said: cryptocurrency lender had $25 billion in assets under management. Now Celsius has dropped to $167 million “cash on hand”, which it says will provide “sufficient liquidity” to support operations during the restructuring process.

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

Private investors have filed a lawsuit in court to help them regain some of their lost property, with some saying that their savings have effectively been wiped out.

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