Alex Mashinsky, who resigned as chief executive officer of Celsius on Sept. 27, reportedly withdrew US$10 million from the crypto exchange in May, weeks before it filed for bankruptcy and froze withdrawals in June, according to the Financial Times.
See related article: Celsius on thin ice well before its bankruptcy: CNBC report
Fast facts
- A spokesperson for the embattled ex-CEO said he “withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes.”
- The spokesperson added that Mashinsky and his family still held US$44 million of frozen crypto assets with Celsius following the withdrawals, which he voluntarily disclosed to the Official Committee of Unsecured Creditors (UCC) during bankruptcy proceedings.
- Celsius halted withdrawals, swaps and transfers in June due to “extreme market conditions,” despite having told customers the company was financially secure and “full speed ahead” just days earlier.
- Celsius filed for Chapter 11 bankruptcy soon after this freezing, claiming that, due to its balance sheet’s US$1.2 billion deficit, “without a pause, the acceleration of withdrawals would have allowed certain customers — those who were first to act — to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”
- Celsius is expected to submit details of Mashinsky’s transactions to a bankruptcy court this week along with other documentation further detailing the company’s financial situation.
See related article: Celsius files for bankruptcy after closing DeFi loans