Celsius Founder Reportedly Withdrew $10M in Weeks Before Bankruptcy

Celsius Network founder Alex Mashinsky withdrew $10 million from the cryptocurrency lender in the weeks before the company froze customer accounts and unraveled on its way toward seeking bankruptcy protection.

Mashinsky allegedly withdrew the money in May, at about the same time customers were pulling their funds from the company and cryptocurrency markets overall were behaving increasingly erratically, the Financial Times reported, citing unnamed sources. The paper also noted that some customers of Celsius were expressing concern with the company that exceeded their worries about the overall cryptocurrency market.

Celsius froze withdrawals on June 12, leaving hundreds of thousands of retail investors unable to access their savings. When the company filed for bankruptcy protection in July, its balance sheet reportedly was $1.2 billion in the red.

At its peak, Celsisus paid interest to depositors of as much as 18 percent on some cryptocurrencies, and at one point held assets valued at $25 billion.

Mashinsky resigned as chief executive last week. The Financial Times reported that the timing of his knowledge about the company’s peril is unclear.

The Financial Times quoted a family spokesman as having said his family and he had $44 million worth of cryptocurrencies frozen by Celsius after the withdrawals that have drawn recent scrutiny.

“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 totaled what he withdrew in May,” the spokesperson reportedly said. “He continues to be committed to working with and uniting the community around a recovery plan that will maximize coin and liquidity for all.”

As PYMNTS noted in July, numerous investors have told authorities since the company’s collapse that they thought Celsius was safer even than banks.

Read more: Celsius Network Crash Leaves Customers Struggling Without Funds

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