Celsius CEO Withdrew $10 Million Before Company Entered Bankruptcy
Celsius founder Alex Mashinsky withdrew $10 million from the now-bankrupt cryptocurrency lender just weeks before the company froze customer accounts and collapsed, according to sources cited by The Financial Times.
Mashinsky is alleged to have made the withdrawals in May, following the collapse of stablecoin issuer Terra, with fears of contagion in the cryptocurrency market causing panicked withdrawals among Celsius' own customers. Around a month later, on June 12, Celsius then froze customer withdrawals, before filing for chapter 11 bankruptcy in July with a hole in its finances worth around $1.2 billion.
The allegations of Mashinsky withdrawing funds comes days after he stepped down as Celsius CEO, amid ongoing bankruptcy proceedings. They will likely heighten scrutiny of his actions prior to the collapse, and raise questions as to what he and other senior figures at the lender knew or understood regarding Celsius' precarious financial situation.
It appears that Mashinsky isn't denying withdrawing the $10 million, although a spokesperson for the former CEO is stating that he had previously made deposits equalling that amount.
"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," said the spokesperson.
Mashinsky's spokesperson also affirms that the former CEO is "committed to working with and uniting the community around a recovery plan" that will offer compensation to the maximum number of Celsius customers. As of writing, these customers are owed some $4.7 billion, with many of them
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