The former Celsius Network CEO Alex Mashinsky reported that millions of dollars were removed from the business before preventing users from withdrawing funds , and then declaring Chapter 11 bankruptcy in July.
Mashinsky Allegedly Withdrew $ 10M
The former CEO and founder of Celsius Alex Mashinsky withdrew a astonishing $11 million out of the company only weeks before the company declared bankruptcy, as a Tuesday Financial Times articlehas claimed.
As per the story Mashinsky took the huge withdrawal at the end of May, prior to that June 12 freezingof customers’ accounts. According to sources who are not named, but that are aware of the issue the withdrawal of $10 million was “pre-planned and tied to the estate planning of Mashinsky”.
The lender was once a renowned one, with more than $24 billion of assets under management, Celsius’s bankruptcy crisis was notable for its onset in June during a crypto market downturn that was widespread. The company applied for Chapter 11 bankruptcy protection one month later, and revealed an $1.2 billion gap in its balance sheet, resulting from bets lost on Terra Lido’s staked Ethereum token and Grayscale’s GBTC fund, as well as loans to the now defunct hedge fund Three Arrows Capital.
Sources also claimed that Mashinsky took tiny amounts of crypto to pay federal and state taxes in advance of the withdrawal of $10 million, and that he “consistently put cryptocurrency into accounts which surpassed the amount he drew during May.”
Mashinsky quitas Celsius the CEO on the 27th of September He said that he said he was “very sorry” regarding the financial challenges Celsius’ customers face as a result of the company’s collapse earlier in the year.
Mashinsky’s decision to withdraw his money has raised lots of questions about whether he was aware prior to his withdrawal that the cryptocurrency lending company was going to block user accounts. However, an Celsius representative informed the Financial Timesthat Mashinsky’s former CEO as well as his family were still holding about $44 million worth cryptocurrency that were frozen through the site.
Celsius is scheduled to provide information about the transactions of Mashinsky before the court in the next few days in a wider disclosure of its finances by the cryptocurrency lender.
On September 30th, William K. Harrington was an U.S. Trustee in the Department of Justice, objected to Celsius plans to open the withdrawal process, arguing that there’s still extensive investigations to be conducted before funds can be unlocked.
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.