Alex Mashinsky, founder of Celsius, feels the heat

Alex Mashinsky, the founder of the crypto loan Celsius, has built up a cult followers by tapping public distrust of the mainstream financial institutions.

Celsius, which was introduced five years ago and offers customers high interest rates for crypto deposits, has attracted 1.7 million customers under the slogan "#unbank Yourself".

Now the company itself is confronted with a crisis of trust after trying to prevent customers from withdrawing money on Monday and led to "extreme market conditions" after a wave of drains and losses in risky business.

Just three days earlier, during his weekly one-hour YouTube show to customers, Mashinsky was in a typical combative form and had dismissed critics who warned of an impending liquidity crisis.

"All of these no and haters have not built anything," said Mashinsky to customers whom he calls Celsians. "Celsius has liquidity in billions of bills, and we offer everyone who needs access to instant access."

Since he does not redeem this promise, Mashinsky is fighting for the survival of the company and its customers fear enormous losses.

John, a commercial real estate agent from Philadelphia who refused to call his last weekend, began to withdraw his money from Celsius last weekend, but still has $ 150,000. "It's definitely a disappointment," he said. "I probably didn't examine him as well as I might have done it."

Mashinsky tweeted on Wednesday that "this is a difficult moment" and that his team "works continuously".

Celsius Marketing has Mashinsky, known for his characteristic "banks are not your friends" t-shirt, as a Robin-Hood figure and self-help guru, which helps customers reach "financial freedom". He has criticized competing crypto groups such as Coinbase for returning more money to Wall Street investors than to their customers, and his personal website contains a rider to "failed undertakings" that offers the lesson that he has learned as a "single investor and entrepreneur".

A regret is the fate that some of his companies suffered in 2008. "When the recession started, Alex 'decision to finance two of his companies with debts became catastrophic because its lenders refused to be patient," says his website.

As a front man of the company, he gave himself to Stunts. In 2020 he shared a video in which he tried to pull a chase sign from the wall of a bank branch in the Avenue in Manhattan. "This is how we break the banks," he wrote. "One chase branch after another."

The Mashinsky, born in Soviet tukraine and grew up in Israel, 56, lives in Manhattan with his wife and six children. His career led him through more than half a dozen tech start-ups, from telecommunications to ride sharing. He holds 35 patents and describes himself as a co-inventor of the voice-over internet protocol, the technology behind online telephony.

Since he founded Celsius, Mashinsky, who gave himself the nickname "The Machine", has followed a quick growth, his financial base last year to a maximum of 25 billion québec and WestCap, a fund that is led by the former Blackstone and Airbnb manager Laurence Tosi.

"The name of the game for crypto individual trading loans was user growth at all costs," said Max Boons, founder of the crypto broker B2C2. He said the pressure to offer high interest rates, lead companies to risky investments "often with unhappy results".

In the close-meshed circle of crypto founders and board chairpersons, some Mashinsky were suspicious. "You managed the company very aggressively," said an investor who thought about investing money in Celsius, but decided against it. "He was a risk -loving guy."

Mashinsky rejected a statement.

Several managers said they had avoided investments or business with Celsius because they had no confidence in Mashinsky or borrowed from Celsius, but would not grant any loans.

Another investor said Celsius was found too often with money that was bound in crypto explosions, such as: B. at collapsed coins terra and luna, or with big hacks. But "Alex simply continues like an energy rabbit," he said.

privately feared crypto managers for at least one year that the risky lending of Celsius looks like "an accident that is waiting for it". Mashinsky always rejected the criticism.

"Out of risk perspective, we are probably one of the most risky companies that supervisory authorities have ever seen worldwide," he told the FT in the past year and referred to the company's ability to survive sales of more than 50 percent in 2020 and 2021. "There is no bank in England that can cope with a loss of 53 percent without giving up the business. That is what is really ridiculous here."

Brett Deluca, an actor from Los Angeles, knows Mashinsky's bold claims from his weekly webcasts. "I would look at his promo things every Friday. He seemed to be quite knowledgeable," said Deluca, who started using Celsius at the beginning of last year. He has $ 20,000 with the company.

Mashinsky's low profile this week is for Deluca. "He likes to stand in front of the camera. He is," he said. "If he doesn't get out of here in a week or two, I will be worried that I will lose my 20,000."