According to a latest report, Celsius founder Alex Mashinsky withdrew $10 million from the crypto lender just weeks before user accounts were blocked.
July 2022 because of massive withdrawals on the network. As the firm entered bankruptcy, it froze user accounts as well.
However, according to a latest report, Celsius founder Alex Mashinsky withdrew $10 million from the crypto lender just weeks before user accounts were blocked. Mashinsky withdrew the cryptocurrency in May 2022, as users began to withdraw their holdings in huge numbers due to concerns about Celsius' financial stability.
The withdrawal disclosures may increase focus on Mashinsky, who resigned on September 27. It also raises the question of whether Mashinsky was aware that Celsius would be unable to refund its users' assets.
Details of Mashinksy's transactions will be provided to the court in the following days. This might be part of Celsius's broader disclosure of its financial issues. However, a firm spokesperson stated that Mashinksy and his family still had $44 million in cryptocurrency locked in the company. He further added:
“Mr. Mashinsky withdrew a percentage of the crypto in his account in mid to late May 2022, the majority of which was used to pay state and federal taxes. He constantly deposited cryptocurrencies in sums totaling what he took in May in the nine months preceding that transaction. He is committed to collaborating with and rallying the community on a recovery strategy that maximizes coin and liquidity for everybody.”
What’s Next for Mashinsky?
As per reports, Mashinsky may be forced to refund the $10 million he withdrew from Celsius Networks. As per U.S. law, payments made by a firm within 90 days of declaring bankruptcy can be clawed back.
Another person familiar with the matter said that $8 million of the withdrawn funds were used to pay taxes on the revenue earned by the assets on Celsius. The remaining $2 million was paid in CEL token, Celsius Networks' native cryptocurrency. The withdrawal was also pre-planned and related to Mashinsky's estate planning, according to the source.
In August, there were additional claims that the Celsius founder used customer funds to place risky bets.