Celsius Network Ltd. Chief Executive Officer Alex Mashinsky, who founded the embattled crypto startup and served as pitchman for the sky-high yields it promised to its thousands of investors, is stepping down as the company works its way through bankruptcy.

The Hoboken, N.J.-based company said it appointed Chief Financial Officer Chris Ferraro, a JPMorgan Chase & Co. veteran, to the role of chief restructuring officer and interim CEO.

The leadership change represents a major shift for the company, which filed for bankruptcy protection in July. Celsius was one of the most notable casualties in this year’s crypto market meltdown, which started with the implosion of the TerraUSD algorithmic stablecoin in May and went on to engulf crypto lender Voyager Digital Holdings Inc., hedge fund Three Arrows Capital and others across the industry while handing investors billions of dollars in losses.

Mashinsky, 56, who co-founded Celsius in 2017, said that he will continue “working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the company filed for bankruptcy,” according to a statement from Cadwalader, Wickersham & Taft LLP, the law firm representing Mashinsky.

The statement included an excerpt from Mashinsky’s resignation letter, which said that he regrets that his role as CEO “has become an increasing distraction.” 

Under Mashinsky’s leadership, Celsius became mired in an increasing number of controversies. The company froze user withdrawals in June as it experienced liquidity issues, faced a lawsuit in July that called the firm a “Ponzi scheme” and disclosed a US$1.19 billion deficit in its bankruptcy filing later that month. Along with Gemini Trust Co. and Voyager, Celsius faced scrutiny earlier this year from the U.S. Securities and Exchange Commission over whether products that pay interest on crypto deposits should be registered as securities.

The company eyed a comeback as Mashinsky laid out plans to pivot to crypto custody during an internal meeting earlier this month, according to a report from The New York Times. Following Tuesday’s announcement, the price of the Celsius token fell 4 per cent to $1.40, according to CoinMarketCap.

Mashinsky “doesn’t have any credibility to push through any reorganization plans, given his track record,” Mike Alfred, a private investor who co-founded BrightScope Inc. and who has been a notable critic of Celsius even before it filed for bankruptcy, said. “In order to get a reorganization plan approved, he probably has to walk away.”

Mashinsky joins a growing list of crypto executives who have resigned or announced plans to step down during the market’s downdraft. Jesse Powell, the often controversial co-founder of crypto exchange Kraken, announced last week that he was giving up the role of CEO to become chairman. In August, crypto brokerage Genesis’s CEO, Michael Moro, and Alameda Research co-CEO Sam Trabucco gave up their titles. Michael Saylor, the long-time CEO of MicroStrategy Inc., stepped down after the software maker and Bitcoin buyer reported more than $1 billion quarterly loss related to the cryptocurrency’s massive price plunge.

Also Tuesday, Brett Harrison, president of crypto exchange FTX US, announced plans of his own to step down.