Court filings have previously confirmed that 300,000 customers have a balance of more than $100, and Celsius is currently grappling with a $1.2 billion black hole in its finances.
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Bankrupt crypto lender Celsius Network has rowed back on attempts to rehire its chief financial officer and pay him $92,000 a month.
Rod Bolger had resigned on June 30, a couple of weeks after the company abruptly halted all withdrawals, swaps and transfers in a shock announcement.
News of the plans to give the ex-CFO such an astronomical paycheck during a time of financial turmoil would have undoubtedly gone down badly with the estimated 1.7 million people who have been unable to access any of their funds for almost two months.
Court filings have previously confirmed that 300,000 customers have a balance of more than $100, and Celsius is currently grappling with a $1.2 billion black hole in its finances.
Initially, Celsius had argued that it was crucial to bring Bolger on in an advisory capacity because of his familiarity with the business, adding:
"His institutional knowledge and experience concerning the unique features of cryptocurrency are invaluable."
However, investors who are in the process of taking legal action against Celsius shot back — claiming that "little detail" was provided as to exactly why Bolger's services were required.
It was also alleged that Bolger had provided false information to customers just days before withdrawals were suddenly halted — and in a blog post four days earlier, he had written:
"The company's strong liquidity framework … This put us in a strong position to weather the recent market turbulence and ensure that clients who needed to access their digital assets could get them free and clear."
Bolger subsequently added that Celsius was "in a strong position to grow as the market recovers."
Lawyers representing claimant Keith Suckno claimed this blog post means one of two things:
"Mr Bolger was either misinformed about the actual financial status of the debtors or deliberately sought to mislead the depositors/investors of Celsius."
Suckno's legal team also questioned the finances surrounding the proposal. Given how Bolger was entitled to receive his base salary of $62,500 for eight weeks through his notice period — concluding August 25 — concerns were raised that this additional consulting fee would effectively mean he was being paid twice.
"The lives of thousands of individuals have been destroyed by virtue of the actions of the debtors. Each day, the Court is deluged with letters from distraught depositors. As a result, before the debtors cavalierly pay an insider nearly $100,000 per month, more information should be required from the debtors including exactly what services will be required from Mr Bolger, why those services cannot be performed by other employees as noted above and that the 'business judgment' standard is actually satisfied here."
A hearing about the proposal was due to take place in court later today — but on Friday, a short update from Celsius Network's lawyers confirmed that the motion to enter into this advisory agreement with Rod Bolger had been withdrawn.
Celsius is yet to make a public statement about the now-abandoned plans.
