Alex Mashinsky, Celsius Founder Files for Bankruptcy

Alex Mashinsky, Celsius Founder Files for Bankruptcy
  • Alex Mashinsky withdrew $10M from the now bankrupt crypto lender.
  • Mashinsky withdrew from his position on September 27th.
  • The court is anticipating information from Celsius on Mashinsky’s dealings.

The Financial Times claimed, citing anonymous sources, that Alex Mashinsky, the troubled founder and former CEO of Celsius Network, withdrew $10 million from the now-bankrupt cryptocurrency lender weeks before Celsius stopped allowing client withdrawals in June.

Mashinsky, who resigned from his position as CEO on September 27 at midnight Eastern time, reportedly withdrew the bitcoin in May. The Terra ecosystem collapsed at the moment, wiping out $60 billion in value that month, shaking up the crypto markets.

After blocking client withdrawals on Monday due to “extreme market conditions,” the corporation now finds itself in a crisis of confidence due to a surge of outflows and losses on hazardous bets.

Only a few months earlier, Mashinsky had been in the usual combative form on his weekly hour-long YouTube show to viewers, rejecting critics who had raised the possibility of a liquidity crisis.

Mashinsky informed his customers, whom he refers to as Celts, that all the doubters and critics “haven’t built anything.” “Celsius has billions in liquid assets, and we provide everyone who wants access to them quick access.”

In a few days, as part of a broader financial disclosure by the firm, Celsius is expected to provide the court with information on Mashinsky’s transactions.

According to a Mashinsky representative, quoted by the newspaper, the businessman revealed to a committee of unsecured creditors (UCC) during the bankruptcy procedures that he and his family had $44 million in cryptocurrency locked with Celsius as a result of the withdrawal. 

According to the FT, the representative said that Mashinsky “‘withdrew a proportion of cryptocurrencies in his account, much of which was used to pay state and federal taxes”.

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Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

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