Celsius founder withdrew $10M before bankruptcy filing: FT | The Financial Express

Celsius founder withdrew $10M before bankruptcy filing: FT

Celsius paused customer withdrawals in June before declaring chapter 11 bankruptcy in July

Celsius founder withdrew $10M before bankruptcy filing: FT
A spokeswoman for Celsius, on the other hand, informed FT that the founder withdrew cryptocurrency at the time to pay state and federal taxes.

Alex Mashinsky, the founder and former CEO of Celsius Network, allegedly withdrew $10 million from the crypto lending platform just weeks before it froze customer funds and filed bankruptcy, as reported by Cointelegraph citing Financial Times.

According to Financial Times sources, Mashinsky withdrew the monies in “mid to late May,” prior to the June 12 halt on all withdrawals.

Celsius was a popular crypto-lending platform with 1.7 million customers and $25 billion in assets under management, however, the company’s financial sheet was left with a $2.85 billion hole due to the current weak crypto market conditions. Cointelegraph noted.

This prompted Celsius to halt customer withdrawals in June before declaring chapter 11 bankruptcy in July, with Mashinksy attempting to restructure and revitalise the company.

As a result, Celsius paused customer withdrawals in June before declaring chapter 11 bankruptcy in July, with Mashinksy aiming to restructure and resuscitate the company around crypto custody services.

The withdrawal raises the question of whether Mashinsky was aware that the corporation would be blocking customer funds and withdrawals ahead of time.

A spokeswoman for Celsius, on the other hand, informed FT that the founder withdrew cryptocurrency at the time to pay state and federal taxes.

“In the nine months leading up to that transaction, he continuously deposited cryptocurrency in sums totaling what he took in May,” the representative said, adding that Mashinsky and his family still had $44 million in cryptocurrency frozen on the platform.

Mashinsky resigned as CEO of Celsius on September 27, stating that his work had “become an increasing distraction,” but that he would continue to focus on assisting in the development of a strategy to restore monies to creditors.

(With insights from Cointelegraph) 

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