Former executives Alex Mashinsky (CEO), Daniel Leon (CSO), and Nuke Goldstein (CTO) cashed out Bitcoin, Ether, USDC, and CEL holdings back in May, just before the company halted all customer withdrawals.
The market instability around that time, and what has now turned into the so-called crypto winter, was a catalyst for various companies to suspend client withdrawals. This revelation makes the executives' withdrawals particularly scandalous and has come to the forefront, especially as the company is in conversation with major exchange FTX for a sale of its assets.
Celsius Execs Cash Out
According to a Statement of Financial Affairs filed on Wednesday, $56.12 million in cryptocurrency was withdrawn during May and June 2022. The filing cited that former executives Alex Mashinsky, Daniel Leon, and Nuke Goldstein withdrew funds largely from custody accounts, taking the digital currency in bitcoin (BTC), ether (ETH), USDC (USDC), and CEL tokens (CEL).
According to the document, one of several filed to the Bankruptcy Court for the Southern District of New York, other company executives, Chief Compliance Officer Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong, and new CEO Chris Ferraro did not take part in the dubious withdrawal.
Celsius filed for Chapter 11 bankruptcy protection in July after it stopped all user withdrawals due to “extreme market conditions” a month before. Despite that, Mashinsky took $10 million in May, Leon took $7 million between May 27 and May 31, and Goldstein withdrew around $13 million the following month.
Celsius Looks To Sell Assets
There are several outstanding cases against the crypto lender and the recent acquisition deal tabled by FTX, which have resulted in the company being under the microscope. The documents revealed were requested by an independent examiner, appointed by the U.S. Trustee’s office to investigate why the company fell apart.
Within the last two weeks, we’ve seen Mashinsky and Leon resign. The remaining team members have discussed restructuring plans and finding ways to turn the firm’s debt into tokens and a potential pivot to crypto custody.
The court has ordered the crypto firm to disclose its monthly budget, cash balance, wages, taxes, and other performance metrics about the bitcoin mining business. The firm must also get permission from the UCC for any existing “critical vendor payment” above $50,000. The company will return to court on October 7th, at 10 am.