Sources mashinsky 10m 8mshubber financialtimes: Former CEO of Bankrupt Crypto Lender Celsius Allegedly Withdrew $10 Million Just Weeks Before Company Froze Customer Accounts: Report

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Former CEO of Bankrupt Crypto Lender Celsius Allegedly Withdrew $10 Million Just Weeks Before Company Froze Customer Accounts: Report

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Alex Mashinsky, the embattled founder and former CEO of Celsius Network, is facing scrutiny after it was reported that he withdrew $10 million from the now-bankrupt crypto lending platform a few weeks before Celsius suspended customer withdrawals in June.

• sources mashinsky 10m 8mshubber financialtimes

alex mashinsky 10m 8mshubber financialtimes

This revelation, according to the Financial Times and its anonymous sources, has raised questions about Mashinsky’s actions leading up to his resignation as CEO on September 27.

sources mashinsky 10m 8mshubber financialtimes

The Financial Times disclosed that Mashinsky executed the cryptocurrency withdrawal in May, a period marked by turbulence in the crypto markets due to the collapse of the Terra ecosystem, resulting in the loss of $60 billion in value.

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Celsius is expected to provide detailed information about Mashinsky’s transactions to the court as part of a broader financial disclosure prompted by the company’s Chapter 11 bankruptcy filing in mid-July.

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A spokesperson representing Mashinsky stated that the entrepreneur had previously informed an unsecured creditors committee (UCC) involved in the bankruptcy proceedings that he and his family had approximately $44 million worth of cryptocurrency assets frozen with Celsius following the withdrawal.

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According to the spokesperson, Mashinsky “‘withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes,'” as reported by the Financial Times.

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The crisis at Celsius escalated in June when the platform froze withdrawals, swaps, and transfers, citing “extreme market conditions.” Just one month later, the company filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.

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In documents submitted to the court, Celsius disclosed a significant imbalance in its financial position, with $4.3 billion in assets and $5.5 billion in liabilities, resulting in a $1.2 billion deficit.

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At the time of the initial bankruptcy filing, Celsius justified the freeze on withdrawals by stating that, without intervention, certain customers who acted swiftly would receive full payment, leaving others waiting for Celsius to recoup value from illiquid or long-term assets before any recovery could be distributed.

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Mashinsky endorsed the decision, characterizing it as “right … for our community and company.” He emphasized the significance of the moment in Celsius’s history, stating that the company’s resolute actions were aimed at serving the community’s best interests and securing the company’s future.