Three Top Celsius Executives Withdrew $42 Million Before Crypto Lender Announced Liquidity Bottleneck

Summary:

New documents in the Celsius bankruptcy hearing revealed withdrawals from top-ranking executives prior to the crypto lender’s decision to pause operations in June.
Ex-CEO Alex Mashinsky, former CSO Daniel Leon, and current CTO Nuke Goldstein cryptos including Bitcoin, Celsius tokens, Ether, and Circle’s USD Coin from custody accounts, court documents revealed late on Wednesday.
The troubled crypto lender is scheduled to hold the final asset auction on October 17, 2022.

Financial Affairs documents filed with a bankruptcy court late on Wednesday revealed that three key Celsius executives withdrew crypto worth around $42 million from custody accounts.

According to the filing, the three executives in question are ex-CEO Alex Mashinsky, former CSO Daniel Leon, and current CTO Nuke Goldstein. The withdrawals were made between May and June 2022, per details from the court document.

This places these transactions before the crypto lender halted operations in June and filed for bankruptcy in July following Terra’s failure. However, it’s worth noting that these Financial Affairs statement does not accuse Mashinsky, Leon, and Goldstein of withdrawing customer funds.

Mashinsky, Leon, And Goldstein Cash Out Celsius (CEL) Tokens From Custody Accounts

Per Wednesday’s filing, Mashinsky who recently stepped down as CEO withdrew crypto worth $10 million in May before the lender froze deposits and other operations. The claim aligns with an earlier Financial Times report that alleged similar transactions by the former Celsius chief.

Leon and Goldstein also withdrew crypto assets from custody accounts including $4 million and $7.8 million respectively in CEL tokens. Bitcoin (BTC), Ether, and USD Coin (USDC) were also withdrawn, per the court document.

CTO Leon also resigned from his position amid the bankruptcy case and the company’s plan to auction off assets as part of a recovery plan. Notably, FTX CEO Sam Bankman-Fried is supposedly interested in buying these assets after securing Voyager Digital assets in a hefty $1.4 billion deal.

Other company executives also made withdrawals in the same time frame but the filing said the transactions were not significant. Wednesday’s filing is the latest news from the ongoing bankruptcy case in a Southern New York District court.

Another court order from Wednesday made it mandatory for Celsius to submit monthly financial reports to the Unsecured Creditors Committee (UCC). The committee represents customers owed crypto assets by Celsius.

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