Former Celsius CEO Withdrew $10M Prior to Bankruptcy

Key Takeaways:

  • Former Celsius CEO Alex MAshinsky withdrew $10 million from the platform prior to the crash.
  • The executive's spokesperson claimed the funds payed off taxes.
  • However, the crypto community is not convinced.
Former Celsius CEO Mashinsky withdrew $10M prior to bankruptcy for "tax purposes"

YEREVAN (CoinChapter.com) – Former chief executive of the infamous crypto lender Celsius Alex Mashinsky made headlines again on Oct 3, after the Financial Times revealed the executive withdrew $10 million from the platform just weeks before freezing customer accounts and filing for bankruptcy.

Mashinsky withdraws funds prior to the Celsius crash

The decision raised eyebrows and sparked concerns that the former CEO was ‘saving his hide’ while not extending the same courtesy to the customers as he knew the company would be in straits after the Terra implosion.

However, Mashinsky’s spokesperson asserted that $8 million was used to pay taxes for the income generated on assets on Celsius. The remaining $2 million was in CEL tokens and utilized for “estate planning.”

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.

commented the spokesperson.

They also added that Mashinsky worked towards “uniting the community around a recovery plan that will maximize coin and liquidity for all.”

The community is not convinced

It looks like the crypto community continues to doubt Mashinsky’s intentions. Simon Dixon, a FinTech Angel Investor and author of ‘Bank To The Future,’ also blamed the former Celsius CEO for ​lying.

You told me everything was fine, Mashinsky, and I should invest more of our clients’ retirement funds. You even broke your silence to blame me for your lying, stealing and cheating.

said Dixon.

A crypto researcher and a member of the Terra Research Forum, with the Twitter handle FatMan also commented on the matter. They asserted that Mashinsky’s claim that the company had “adequate reserves” in May was “pathetic.”

In the days leading up to the Celsius collapse, Mashinsky assured customers that everything was okay, claiming he had “adequate reserves.” Unbeknownst to them, he was simultaneously withdrawing millions of dollars from the soon-to-be bankrupt company into his own pocket. Pathetic.

commented FatMan.

Also read: Vladimir Putin officially annexes Ukraine’s Donetsk, Luhansk, Kherson, & Zaporizhzhia into Russia.

Will FTX make a move on Celsius assets?

As Celsius struggles to retrieve investor assets, FTX, one of the largest crytpo exchanges, eyed Celsius funds with interest. According to a person familiar with FTX CEO Sam Bankman-Fried’s deal-making, the crypto billionaire is considering a bid.

In addition to its lending business, Celsius owns large Bitcoin mining operations and a crypto custody business. It’s unclear if Bankman-Fried’s crypto companies are considering bidding for some or all of Celsius’s assets.

In the meantime, the Celsius bankruptcy case continues. On Sep 30, the Department of Justice slammed Celsius’ motion to approve fund withdrawal for select accounts.

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celsius ceo, Former Celsius CEO Withdrew $10M Prior to Bankruptcy

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