Customer withdrawals were previously blocked by cryptocurrency lender Celsius in June. The company declared bankruptcy the next month, with a $1.2 billion hole in its balance sheet. According to newly revealed information, the founder of Celsius Network allegedly withdrew money in May before the alleged events took place.
A recent Financial Times article claims,
“Celsius Network founder Alex Mashinsky withdrew $10mn from the crypto lender just weeks before the company froze customer accounts as it spiralled towards bankruptcy, according to people familiar with the matter.”
The Celsius executive left the company only last week. The Financial Times reported that because Mashinsky was aware that the company would not be able to restore customer assets, the withdrawal discoveries at this point “would deepen scrutiny” of him and “raise issues.”
It is important to note that Celsius will likely provide information about Mashinsky’s transactions in court in the upcoming days as part of a “broader disclosure” of its financial affairs.
Celsius founder’s $44M crypto assets still frozen
A representative for Mashinsky revealed that after the withdrawals, he and his family still have $44 million in crypto assets frozen with Celsius. According to reports, the executive told the UCC (unsecured creditors committee) about the information during the bankruptcy procedures. Regarding the purpose of the funds, the spokeswoman stated,
“In mid to late May 2022, Mr Mashinsky withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes. In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totalled what he withdrew in May.”
The representative went on to say,
“He continues to be committed to working with and uniting the community around a recovery plan that will maximise coin and liquidity for all,” they added.
The executive had promised in his note that he would still endeavor to “deliver the best solution for all creditors” despite his resignation.
