3 Celsius executives withdrew over $50m in crypto just before bankruptcy

According to recently published court documents, Celsius’s top three executives of the crypto lending business withdrew a total of $56.12 million worth of cryptocurrency between May and June 2022, just before the company ceased withdrawals and filed for bankruptcy.

Former CEO Alex Mashinsky, former CSO Daniel Leon, and CTO Nuke Goldstein allegedly removed the cash in Bitcoin (BTC), Ether (ETH), USDC (USDC), and CEL (CEL) tokens from custody accounts, as detailed in a Statement of Financial Affairs submitted late Wednesday, October 5, CoinDesk reported on October 6.

Per the record, over a dozen other officials, including the firm’s Chief Compliance Officer, Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong, and incoming CEO Chris Ferraro, made no major withdrawals during that time period.

In May 2022, Mashinsky withdrew around $10 million in cryptocurrencies. Between May 27 and May 31, Leon withdrew around $7 million (with an extra $4 million in CEL labeled as “collateral”). Goldstein withdrew around $13 million (with an extra $7.8 million in CEL denoted as “collateral”).

Celsius files for bankruptcy in July

Notably, Celsius filed for Chapter 11 bankruptcy protection in July, a month after it froze all customer withdrawals due to “extreme market conditions.” The papers released on Wednesday are the latest milestone in the troubled crypto lender’s bankruptcy lawsuit. The U.S. Trustee’s office hired an independent examiner to investigate why Celsius failed and how it handled and kept client money. Within the last two weeks, both Mashinsky and Leon have left their positions at the firm. Notably, Finbold reported Celsius had also accused former manager Jason Stone of stealing millions of dollars in a lawsuit back in September.

Leaked audio recordings revealed that senior executives discussed new ideas to reorganize the lender, including issuing tokens for the company’s debt and perhaps shifting to crypto custody. The court, however, will proceed with the auction of Celsius’ assets at the end of the month.

Another document released on Wednesday shows that the bankruptcy court has ordered Celsius to keep the Unsecured Creditors Committee (UCC), which represents all consumers to whom Celsius owes assets, informed on a regular basis regarding its financial condition and cash management.