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Celsius: The Crypto Giant’s Tumultuous Journey


The journey to success is never easy!

The first Bitcoin transaction was made in 2009, and very soon after, this new technology took the world by storm. Celsius Network aims to use this fintech innovation to make a positive impact on the world.

The company was founded by Alex Mashinsky, Nuke Goldstein, and Daniel Leon in 2017. It was initially nothing more than a promising idea jotted down on a coffee shop napkin. However, through painstaking work, the three founders turned their dream into reality.

As cryptocurrency became a popular financial asset, Celsius rose to be one of the most prominent players in the crypto lending market. But can this change in the future? And will it?

Although it hasn’t always been smooth sailing for Celsius, find out how the founders persevered and continue to fight for their vision.

The Bright Minds Behind Celsius

Alex Mashinsky was born in 1965 in Ukraine. His family obtained permission to leave the country in 1970 and subsequently moved to Israel, where Alex was raised and educated. He obtained a BE in Electrical Engineering from the Open University of Israel in 1982 and later a BS in Economics from Tel Aviv University in 1989.

At this point in time, Alex was far from the idea of Celsius – in fact, crypto hadn’t even been invented yet. However, Alex worked on many other projects and used his skills in building up companies to become a serial entrepreneur.

He founded seven start-ups and holds over 30 patents, including the VoIP (Voice Over Internet Protocol) – technology that had a significant positive impact on telecommunications.

By 2017, Alex was more focused on investing than working on yet another start-up. However, that would change after he had an impactful talk with Daniel Leon.

We Have To Look at This “Bitcoin Thing”

Daniel is a business and social entrepreneur himself. He graduated from Brown University with a BA in Economics in 2000 and worked as VP and General Manager for different organizations. Throughout the years, he also served as CEO of many of his own start-ups.

Alex and Daniel had known each other for years before they co-founded Celsius and regularly communicated on business matters. In 2017, Daniel got advice from a friend to look into cryptocurrencies – a tip he passed over to Alex.

It took little time before both men were fully on-board with the project. Although they were comfortable investing in other firms – entrepreneurs like them couldn’t sit still for long. They wanted to be active participants in a project that could make a huge impact.

Wired for Engineering

The third co-founder, Nuke Goldstein, knew he’d end up in the tech world, even if he didn’t always know it’d be as the founder of Celsius. From his youth, Nuke was intelligent, resourceful, and driven in his pursuits. He always enjoyed building something new with his Legos, and eventually, that passion for creating translated to programming.

In 1997, Nuke got a BSc in Computer Science from The Technion – Israel Institute of Technology. He held a couple of different positions throughout the years, but it wasn’t long before he, too, jumped into the world of start-ups and entrepreneurship.

By the time he received the initial Celsius whitepaper draft, Nuke had enough experience to recognize a good idea. He quickly decided to go all into crypto with Celsius and became the company’s CTO.

How Does Celsius Network Work?

Celsius Network promotes itself as a wide-ranging store for everyone’s crypto needs. This lending platform offers different features like borrowing, buying, earning, and swapping cryptocurrencies.

The company allowed depositors to earn interest in specific cryptocurrencies; meanwhile, it charged borrowers between 0-8.95% on bitcoin-backed loans. Celsius’ revenue came from token sales, lending, mining, and discretionary trading.

However, Celsius did more than offer fintech to users – it helped people embrace crypto and realize the fallacies in traditional banking.

The Rise of Celsius

The company rose to success in March 2018 when the team raised $50M in its initial coin offering (ICO) of the CEL digital currency. Within a month, the CEL token began trading worldwide.

A few months after this success, in June 2018, the company launched the very first version of the Celsius app. By December of that same year, Celsius Network exceeded $50 million in community assets and $100 million in coin loan origination.

Celsius showed immediate success with an average weekly growth of 3.06% because it offered low-interest borrowing credit lines and a simple payment system.

Financing Celsius Network

After the great success of its ICO, Celsius went on to do 6 more funding rounds and make quite a name for itself.

In 2019, the company raised $24 million from an equity round where it was valued at $140 million. In June, it acquired the UK-based firm BSAVE.

The following year, the company continued to raise millions from crowdfunding, series A, corporate, and venture rounds. 2020 had been an excellent year for the team, and they continued to grow their company.

In October 2021, Celsius raised $400 million in assets from investors, held $9 billion in community deposits, and had around 400,000 users. At this point, it also acquired GK8 – a cybersecurity company – for $115 million.

In January 2022, Celsius owned the largest cryptocurrency deposit account worldwide. However, the quick rise would, unfortunately, be followed by a very sudden fall for Celsius.

The Bankruptcy of Celsius Network

Although the crypto market was facing a collapse in May 2022, the company was still offering double-digit returns on its site and had around 1.7 million customers.

Quite unexpectedly, in June 2022, they stopped swaps, transfers, and withdrawals due to extreme market conditions. This led to a decreased price of Celsius's CEL token that they have been successfully trading for almost 7 years.

In a matter of just a few months, Celsius went from being one of the most prominent platforms in the industry to facing major trouble. The company filed for Chapter 11 bankruptcy on July 13th, 2022. During this time, the company cut around 150 jobs due to the challenging period, meaning a quarter of all employees were laid off.

The Aftermath

Immediately after Celsius filed for bankruptcy, the negative impact on customers’ lives became apparent. People criticized the company and believed users were fooled by marketing that presented Celsius as a high-yield and low-risk saving account.

1.7 million customers were affected, and many have tried pleading with the Southern District of New York to get their money back. However, the outcome of this situation is unpredictable, and no one can say for sure what will happen to the assets.

No one knows how the whole situation will be resolved – the company may reopen, or it may stop the withdrawals indefinitely.

One thing’s for sure, though, the founders have hopes of reviving the company and getting back to the top. Alex hopes to rebuild and compares Celsius Network’s current struggles to corporate turnarounds at world-famous brands like Pepsi and Delta, which have both filed for bankruptcy in the past.

Celsius Today and Hopes for the Future

Celsius Network, at its height, had over 200 employees, headquarters in Hoboken, New Jersey, and offices in London, Tel Aviv, Cyprus, and Serbia.

Although the company is going through a rough patch, the founders and executives remain optimistic about the future. No one at Celsius has ever shied away from risks, so their plans to revive the firm may be bold and, more importantly, fruitful.

Although it will take time and a lot of work to bring back customers and get them to trust the Celsius brand, if anyone can do it, it’s this dedicated team. After all, it’s always the darkest before dawn!