Celsius founder reportedly withdrew $10 million before filing for bankruptcy: FT

Celsius Network founder and former CEO Alex Mashinsky allegedly withdrew $10 million from a cryptocurrency lending platform weeks before the company froze customer funds and declared bankruptcy. .

Mashinsky withdrew the funds in “mid-to-late May,” prior to the June 12 moratorium on all withdrawals, Financial Times sources said.

Celsius was a popular crypto lending platform with 1.7 million customers and $25 billion in assets under management, but due to general crypto market conditions, it ended up with $2.85 billion on the company’s balance sheet. A dollar gap has occurred.

This prompted Celsius to file for Chapter 11 bankruptcy in July after suspending customer withdrawals in June, while Mashinksy attempted to restructure and revive the company to become one based on cryptocurrency custody services. rice field.

The withdrawal raises questions as to whether Mashinski knew in advance that the company would freeze customer funds and withdrawals.

However, a spokesperson for Celsius told the FT that the founders withdrew from the cryptocurrency at the time to pay state and federal taxes.

“In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in the total amount he withdrew in May,” said a spokesperson, adding that Mashinsky and his family still have $44 million on the platform. In addition to the dollar -equivalent cryptocurrency, it was frozen.

Meanwhile, sources told the FT that the withdrawal had been pre-planned in line with Mashinski’s property plans.

Approximately $8 million worth of assets withdrawn were used to pay income tax resulting from the yield generated by the assets, with the remaining $2 million comprised of the platform’s native token CEL.

Related: Learning from Celsius: Stop Exchanges from Stealing Your Money

The transaction in question could be questioned when presented by Celsius in court in the coming days as part of financial disclosures by crypto lenders.

Macinsky may be forced to return $ 10 million. The 90 days before the bankruptcy application may be canceled to benefit the creditors, based on US laws.

Mashinsky stepped down as CEO of Celsius on Sept. 27, saying his role had become “increasingly distracting” but would remain focused on helping creditors find a plan to return the money. Stated.