Celsius founder Alex Mashinsky withdrew $10M weeks before bankruptcy – FT

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October 3, 2022 by CoinSurges
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Celsius Network’s founder Alex Mashinsky reportedly withdrew $10 million from the struggling crypto lender a few weeks before the firm froze its customer funds and filed for bankruptcy, the

Celsius Network’s founder Alex Mashinsky reportedly withdrew $10 million from the struggling crypto lender a few weeks before the firm froze its customer funds and filed for bankruptcy, the Financial Times reported on October 2.

According to the report, the withdrawals happened in May, around the same period when the broader market was still reeling from the Terra ecosystem’s implosion.

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Details of this transaction, alongside other transactions, would be submitted to the court by the embattled firm in the coming days.

The FT report stated that Mashinsky’s Celsius withdrawal raises questions about whether he knew the firm would be unable to meet its obligations to its customers at the time.

Mashinsky claims withdrawal was for tax payment

A spokesperson for Mashinsky who spoke to FT said that the withdrawals were made to offset “state and federal taxes.” He continued that “(Mashinsky) consistently deposited cryptocurrency in amounts that totaled what he withdrew in May.”

The spokesperson further revealed that Mashinsky and his family still had $44 million worth of crypto frozen on the platform.

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Meanwhile, there is a possibility that the former CEO could be forced to return the funds. Payments by bankrupt companies 90 days before their declaration could be reversed for the benefit of all creditors under United States laws.

Mashinsky had faced several criticisms for promoting false information about the safety of users’ funds when the crypto lender was on the brink of bankruptcy.

Mashinsky resigned his position as CEO on September 27, saying his role as CEO became a distraction while apologizing for the “difficult financial circumstances.”

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Investor claims Mashinsky asked him to invest more

Simon Dixon, BnkToTheFuture’s CEO, stated that Mashinsky told him “everything was fine” while urging him to “invest more clients’ retirement funds.”

Dixon also stated that he wants “insider clawback.” According to Wikipedia, a clawback refers to any money or benefits that have been given out but are required to be returned because exceptionalial circumstances or events.

The post Celsius founder Alex Mashinsky withdrew $10M weeks before bankruptcy – FT appeared first on CryptoSlate.

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