Celsius Network founder and ex-CEO Alex Mashinsky withdrew $10 million before the company froze customer withdrawals and ultimately declared bankruptcy, the Financial Times reports.
Citing people familiar with the matter, the FT reported that Mashinsky withdrew the $10 million in May. Withdrawals were frozen on June 12 due to customer concerns about the crypto bear market and the crypto lender’s financial stability.
Mashinsky and his family had $44 million worth of crypto assets frozen in the crypto lender following his withdrawal, a spokesperson told FT. Mashinsky resigned as CEO on Sept. 27, 2022.
“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 spokesperson was quoted as saying.
Mashinsky co-founded Celsius in 2017, and the firm reached a $3 billion valuation by the end of 2021. The firm filed for Chapter 11 bankruptcy on July 18 and has been embroiled in legal proceedings since.
The Vermont Department of Financial Regulation even alleged that the firm ran a Ponzi-like scheme and that client funds were not safe – despite the firm assuring users that they were.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.