Celsius Network founder and former CEO Alex Mashinsky allegedly withdrew $10 million from the crypto lending platform just weeks before the company froze customer funds and declared bankruptcy.
Celsius was a popular crypto-lending platform with 1.7 million customers and $25 billion in assets under management but the prevailing poor crypto market conditions eventually led the company to a $2.85 billion gap in its balance sheet.
This led Celsius to pause customer withdraws in June before filing for chapter 11 bankruptcy in July with Mashinksy attempting to restructure and revive the company to be based around crypto custody services.
The withdrawal raises questions about whether Mashinsky knew ahead of time that the company would be freezing customer funds and withdrawals. However, a spokesperson for Celsius stated that the founder withdrew cryptocurrency at the time to pay state and federal taxes.
Roughly $8 million worth of assets withdrawn were used to pay income taxes arising from the yield the assets produced, and the remaining $2 million was made up of the platform’s native token CEL.
