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Kelsios withdraws proposal to hire CFO at $92,000 per month

Celsius on Thursday was sued by former chief investment officer Jason Stone, as pressure continues to mount on the company amid falling cryptocurrency prices. Stone claimed, among other things, that Celsius CEO Alex Mashinsky (above) was “in a position to enrich himself significantly”.

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Struggling lending platform Celsius has pulled the plug his proposal to bring back the former CFO Rod Bolger at $92,000 per month, prorated over a period of at least six weeks; according to a court document was filed in the Southern District of New York on Friday. The withdrawal notice came shortly before a hearing scheduled for Monday to review it.

While Bolger worked full-time at the company as CFO, the initial movement is shown 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 contract options, bringing the top of his total income range to about $1.3 million. The filing also said Bolger is technically still on the company’s payroll.

“On June 30, 2022, Mr. Bolger notified the Debtors that he was voluntarily terminating his employment.” reads the deposition. “Pursuant to the Notice of Termination and the terms of his Employment Agreement (as defined below), Mr. Bolger is required to give the Debtors eight weeks’ notice, which he did, and continues to serve as an employee of the Debtors.”

If the motion had been approved, it’s unclear whether Bolger would potentially receive $62,500 in compensation (his monthly base salary), in addition to the $92,000 monthly consulting fee Kelsi had requested. The filing said he continued to serve as an employee of Celsius, but also noted that Bolger was “not entitled to severance pay.”

CNBC reached out to Celsius to ask about the terms of the proposed proposal, but did not immediately receive a response to our request for comment, sent after business hours.

The decision to reject the proposal came three days after CNBC first reported the request to enlist Bolger’s help as counsel in the bankruptcy process. It also follows a formal objection filed by Keith Suckno, a CPA and Celsius investor who challenged Celsius’ move, claiming “little detail” was given as to why Bolger’s services were necessary in the bankruptcy process.

In the initial movement, Celsius said it needed Bolger to help it explore the bankruptcy process as counsel, “because of Mr. Bolger’s familiarity with the Debtors’ business.” It went on to say that during Bolger’s tenure, he led efforts to stabilize the business during turbulent market volatility this year, guiding the financial aspects of the business and acting as the company’s leader.

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

Bolger’s last days at Celsius

In Suckno’s objection to bringing Bolger back to lead the bankruptcy proceedings, it claimed that Bolger had “questioned the financial condition and liquidity” of Celsius in a company blog post titled “Meet Rod Bolger, Chief Financial Officer, Celsius” it was 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 print interview that Celsius’ “strong liquidity framework, established practices around liquidity data and models” were similar to other major financial institutions.

“This put us in a strong position to weather the recent market turmoil and ensure that customers who needed to access their digital assets could get it 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 this blog post — and three days before Celsius froze customer funds on the platform — Bolger appeared on Celsius’ weekly ask-me-anything show on YouTubein which he said the company welcomes the arrangement.

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

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

The video was posted on Friday, June 10, and the following Monday, June 13, Kelsi closed the on and off ramps to user money. Celsius owes its users about $4.7 billion, according to her bankruptcy.

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

After Bolger stepped down as CFO, Celsius then installed Chris Ferraro, then head of financial planning, analysis and investor relations for Celsius. Within days of his appointment, the company filed for bankruptcy.

Once a titan of the crypto-lending world, Celsius is now facing allegations that it ran a Ponzi scheme by paying early depositors with the money it took from new users.

At its peak in October 2021, CEO Alex Mashinsky said that The crypto lender had $25 billion in assets under management. Now, Celsius is down $167 million in “cash on hand,” which it says will provide “abundant 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 the deal. Its top 50 unsecured creditors list includes Sam Bankman-Fried’s trading firm Alameda Research.

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

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