Alex Mashinksy, the previous CEO and founder of Celsius Network, allegedly extracted $10M from his crypto lending firm only weeks ahead of the company’s freezing of the consumers’ funds as well as the declaration of bankruptcy. The respective withdrawal was referred to by the Financial Times’ resources and they pointed out that the funds were extracted by Mashinsky between the latter period of May as well as the 12th of June this year.
FT Reports that Mashinsky had Extracted $10M from Celsius before Its Bankruptcy Filing
According to FT, the respective event took place in advance of the pause implemented by Celsius on withdrawals of all kinds. The company was prominent with possessing up to 1.7M consumers as well as $25B worth of assets under management (AUM) however the dominant conditions throughout the market of cryptocurrency have eventually driven the platform to a gap of nearly $2.85B in the balance sheet thereof.
Due to this, in June, Celsius was compelled to halt its users’ withdrawals before submitting a bankruptcy filing in the next month, with Mashinsky endeavoring to revive as well as restructure the firm to be grounded on the services related to crypto custody. A few questions are raised by the withdrawal regarding if the Celsius founder had known before the time that his venue would freeze the withdrawals and the funds of the clients.
Nevertheless, a spokesperson for the crypto exchange disclosed that the crypto was extracted by Mashinsky at that time for recompensing the federal and state taxes. In the 9 months paving the way toward the withdrawals, the founder continuously deposited crypto assets in diverse amounts which he suddenly withdrew in their total figure during May, in the words of the spokesperson.
Celsius’ Former CEO Even Still Possesses $44 Million in the Company’s Frozen Assets
He added that Mashinsky as well as his family members even then had a huge amount of approximately $44M in frozen crypto assets on the venue. In the meantime, FT was told by the sources that the Celsius founder pre-planned the withdrawal keeping in view his estate planning. The extracted assets’ $8M worth was utilized for recompensing the income taxes implemented on the profit generated by the assets.
The other $2M worth contained CEL (the native token of the Celsius platform). Mashinsky left Celsius as its CEO on the 27th of the previous month. The reason he gave for this decision was that the role played by him in the venue had turned into a growing distraction. However, he assured to keep on assisting Celsius and pursue a strategy to return the creditors’ funds to them.
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