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Ex-CEO of bankrupt crypto lender Celsius withdrew $10M before company froze customer accounts

The Financial Times claimed, citing anonymous sources, that Alex Mashinsky, the embattled founder and former CEO of Celsius Network, withdrew $10 million from the now-bankrupt cryptocurrency lender weeks before Celsius stopped allowing client withdrawals in June.

Mashinsky, who resigned from his position as CEO on September 27 at midnight Eastern time, reportedly withdrew the bitcoin in May. The Terra ecosystem collapsed at the moment, wiping out $60 billion in value that month, shaking up the crypto markets.


In a few days, Celsius is expected to provide the court with information on Mashinsky's transactions as part of a larger financial disclosure by the firm, according to the Financial Times.


According to a Mashinsky representative, who was quoted by the newspaper, the businessman revealed to a committee of unsecured creditors (UCC) during the bankruptcy procedures that he and his family had $44 million in cryptocurrency locked with Celsius as a result of the withdrawal. According to the FT, the representative said that Mashinsky "withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes".

A month after freezing transfers, swaps, and withdrawals on its platform in June due to "extreme market conditions" Celsius filed for chapter 11 bankruptcy in the United States. The Southern District of New York bankruptcy court. Celsius claimed it had a $1.2 billion hole in its balance sheet in a later court filing. According to the paper, Celsius had assets of $4.3 billion and liabilities worth $5.5 billion.


When declaring bankruptcy for the first time, Celsius said in a statement that "without a pause, the acceleration of withdrawals would have allowed certain customers – those who were first to act – to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery."


Mashinsky continued, "We will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company," adding that the choice was "right...for our community and company."

By fLEXI tEAM

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