Bosses of bankrupt crypto lender extracted multi-million dollar funds the month before suspending client withdrawals from the platform
The former CEO of beleaguered crypto lending firm Celsius would not have been the only one withdrawing large sums of money from the platform days before filing for bankruptcy in June 2022.
According to a report on Thursday, three top executives at the company reportedly withdrew at least $30 million in crypto between May and June 2022, just before Celsius suspended withdrawals and ultimately filed for bankruptcy protection. It was reported by the CoinDesk news portal , citing new court records.
Earlier this week, a Financial Times report revealed that Celsius co-founder and former CEO Alex Mashinsky had withdrawn $10 million in May and that, along with his family, he had some $44 million in digital assets frozen on the platform afterward. of his retirement. Most of that money was used to pay taxes, that report noted.
Celsius is one of the crypto lending services that faced solvency problems amid falling virtual currency prices.
Celsius is one of the cryptocurrency lending services that faced solvency problems amid falling virtual currency prices. The platform suspended withdrawals, trades and transfers on June 12 citing “ extreme market conditions ” and a month later filed for Chapter 11 bankruptcy protection in a New York court.
Withdrawals of more than at least USD 30 million
However, shortly before taking that step, two other company executives also reportedly opted to make withdrawals. According to a Statement of Financial Affairs filed Wednesday, and cited by CoinDesk , former COO Daniel Leon and CTO Nuke Goldstein withdrew funds.
The money largely came from custody accounts in the form of Bitcoin (BTC), Ether (ETH), USD Coin (USDC), and CEL tokens, according to the report. Leon reportedly withdrew around $7 million and an additional $4 million in CEL between May 27 and May 31. Goldstein's withdrawals, meanwhile, amounted to $20.8 million in digital currencies. The US$10 million withdrawal made by Mashinsky in May would also have been in the same cryptocurrencies, according to the report.
Meanwhile, a dozen other company executives did not make significant withdrawals during the period, according to one of the documents filed with the Bankruptcy Court for the Southern District of New York.
The report comes just days after both Mashinsky and Leon left their respective positions at the company. Both co-founders of Celsius announced their departure effective immediately with a one-week break; the CEO at the end of September and the director of operations at the beginning of this month.
In the middle of the bankruptcy process
Wednesday's financial disclosures are part of the bankruptcy process. In addition to this information, the bankruptcy court ordered Celsius to regularly update the Unsecured Creditors Committee (UCC), which represents all clients to whom Celsius owes money, about its financial status and cash management.
As a result, the crypto lender must disclose its monthly budget and cash balance, salary expenses, taxes, among other capital flows, and various performance metrics about its Bitcoin mining business and any sales of the coins mined at those facilities. The company must also obtain permission from the UCC for any “critical vendor payments” above $50,000, according to the CoinDesk report .
As part of the bankruptcy process, an independent agency is currently investigating why Celsius failed and how it managed and stored customer deposits. A next hearing on the case is scheduled for October 7.
إرسال تعليق