The founder of Celsius Network has withdrawn $ 10 million before bankruptcy

The founder of Celsius Network, Alex Mashinsky, withdrawn $ 10 million from the crypto loan, just a few weeks before the company frozen, when it got into the bankruptcy, the person familiar with the matter.

The withdrawal of crypto by Mashinsky in May this year, when customers deducted their assets in large numbers from the company, frightened of the greater turbulence on the cryptoma markets and the concern for the financial health of Celsius.

Celsius frozen on June 12, which caused hundreds of thousands of small investors to have no access to their savings. The company reported bankruptcy in July with a 1.2 billion dollar hole.

The company had a top value of crypto assets worth $ 25 billion last year, which were deposited by customers who were attracted by the excessive interest rates in Celsius, which could be up to 18 percent in certain cryptocurrencies.

The revelations about the withdrawal will intensify the examination of Mashinsky, which resigned as CEO on Tuesday, and raised questions about when he knew that Celsius could not return their assets.

Details on the transactions of Mashinsky will be presented by Celsius as part of a more comprehensive disclosure of his financial matters in court in the coming days.

A spokesman for Mashinsky said that even after the withdrawals, he had still frozen $ 44 million of crypto assets at Celsius, which he voluntarily disclosed the official committee for unsecured creditors in the insolvency proceedings.

"In mid to the end of May 2022, Mr. Mashinsky took off a percentage of cryptocurrency from his account, of which a large part of which was used to pay state and federal taxes. In the nine months before this payment, he consistently paid in cryptocurrency in amounts that he had in May," said the speaker.

"He continues to work with the community and to unite them to unite a recovery plan that maximizes coin and liquidity for everyone," they added.

Mashinsky, 56, was a co -founder of Celsius in 2017 and was the company's public face, which appeared in weekly video speeches on YouTube, where he spread his message of financial exemption from banking.

at the end of 2021 Celsius was rated with $ 3 billion, since it spent $ 600 million on capital investments from the US investment company WestCap and Canada's second largest pension fund Caisse de Dépôt et Placement du Québec.

Despite the Mashinsky's public upward movement, the company fought with weak internal systems to manage its assets behind the scenes and temporarily paid more interest to customers than it generated from lending.

In the years 2021 and 2022,

Celsius also suffered a number of loss of investment that contributed to his downfall but were not communicated to the customers. Last month, the financial supervisory authority of Vermont claimed that Celsius was already insolvent on May 13 of this year.

The company recorded enormous flows of assets in May when the cryptoma markets were shaken by collapsing two interconnected cryptocurrencies, terrausd and luna. Their decline led to a number of corporate slides in the entire crypto industry.

just a few days before Celsius frozen, the crypto loan assured the customer that he had sufficient reserves, and explained "full strength".

Mashinsky, a former telecommunications entrepreneur, is about to be forced to be forced to return $ 10 million, which he has withdrawn from Celsius. According to US law, payments of a company can be reclaimed in the 90 days before its bankruptcy in favor of all creditors.

Around $ 8 million of the assets that pulled out Mashinsky were used to cover taxes that resulted from the income that had generated the assets on Celsius, one of the persons familiar with the matter.

The remaining $ 2 million were units of Celsiuss Native “Cel” token. The withdrawal was planned and linked to Mashinsky's estate planning, added the person.

Mashinsky was Celsius's greatest shareholder and said he was one of the greatest creditors on bankruptcy. At the beginning of this week, he apologized to the customers in his letter of termination and said that he regretted "the difficult financial circumstances with which the members of our community are faced with,".