Celsius founder withdrew $10M weeks to crypto lender’s bankruptcy: Report

Celsius Network (CEL/USD) founder Alex Mashinsky, who recently resigned as the bankrupt crypto lender’s CEO, withdrew $10 million from the firm’s accounts just weeks before it announced a halt to all customer withdrawals, according to a Financial Times report.

This latest Celsius news report, which cites unnamed sources, claims the embattled Celsius ex-CEO pulled the money in May, just as the crypto market descended into a massive contagion. The period had seen the collapse of cryptocurrency Terra Luna and its stablecoin TerraUSD, with deleveraging and customer jitters mounting as crypto hedge fund Three Arrows Capital (3AC) hit the dust.

Celsius paused customer withdrawals on 12 June, with the company going on to file for Chaper 11 bankruptcy in July sporting a balance sheet with a $1.2 billion hole.

Money used to ‘pay taxes’

According to a spokesperson of the ex-CEO, Mashinsky did disclose that $44 million belonging to him and his family are frozen together with other assets on Celsius. The disclosure was made to the unsecured creditors committee (UCC), with most of what the founder withdrew going into payment of state and federal taxes.

These revelations, the FT noted in its report, will more than likely see Mashinsky face a lot more scrutiny as Celsius submits details of his transactions to court.

The exercise, which is planned for the next few days, is part of the disclosures expected to shed more light on Celsius’ financial health.