Crypto firm Celsius to tap former CFO to advise on bankruptcy proceedings

Dive Brief:

Embattled cryptocurrency firm Celsius is looking to draw upon the financial expertise of its former CFO Rod Bolger as it moves forward with bankruptcy restructuring. Attorneys for the company submitted a motion Monday with the U.S. Bankruptcy Court Southern District of New York to tap Bolger as an advisor during the proceedings. The court will consider the motion in a hearing set for Aug. 8.
Bolger only served as CFO for the firm for a scant five months, notifying Celsius of his departure 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 Mr. Bolger’s services and expertise as they manage their transition into chapter 11 and begin negotiating a path forward,” attorneys for Celsius wrote in the motion. “His institutional knowledge and experience concerning the unique features of cryptocurrency are invaluable.”

Dive Insight:

Celsius is looking to utilize Bolger as an advisor for six weeks, per the filing, and the former CFO will receive a retainer of approximately $93,188 USD ($120,000 CAD) per month for performing advisory functions.

Attorneys for the company cited the need for stability in their motion to tap Bolger as a bankruptcy advisor, noting that following “a tumultuous series of events” including a crypto downturn and the continued war in Ukraine that “the Debtors are working in earnest to stabilize their business.”

Bolger previously served as CFO for the Royal Bank of Canada (RBC) for five years beginning in 2016 prior to joining Celsius, and has held CFO positions for Bank of America and served in several executive roles for Citigroup. Celsius’ current CFO is Chris Ferraro, a 17-year veteran of JPMorgan Chase bank, who took the seat on July 11.

The RBC alum joined Celsius in February 2022 following the arrest of previous CFO Yaron Shalem on suspicion of money laundering, fraud and other offenses by the Israeli police’s national fraud investigation unit, according to a Nov. 2021 report by cryptocurrency publication CoinDesk. Celsius appeared to address the situation at the time of the arrest in a Nov. 26 tweet that stated an unidentified employee had been suspended. It also stated no assets had been “misplaced or mishandled” at the time of the arrest.

Shalem was one of several high-profile cryptocurrency individuals arrested in Tel Aviv following reports of potential fraud, according to a report by the Financial Times.

The company was one among several cryptocurrency firms that faltered following a $2 trillion crash earlier this year, with fellow digital asset firm Voyager also filing for Chapter 11 bankruptcy on July 5. Celsius is also facing a liquidity crisis, with a gaping $1.2 billion hole on its balance sheet. A July 15 report by Business Insider shows the company has $5.5 billion in liabilities — owing $4.7 billion to its users — with total assets standing at $4.3 billion.

The company has 1.7 million registered users, according to its July 27 filing, including approximately 300,000 active users with account balances which are greater than $100. Cryptocurrency withdrawals, swaps and transfers are all currently paused, according to the Celsius website.