According to a recent court filing, three Execs, including the former CEO of Celsius, cashed out over $56 million worth of crypto before declaring bankruptcy.
The collapse of the bankrupt crypto lender Celsius is leading the central role behind the bearish trend of the current crypto market. The crypto industry has witnessed several turmoils, including exploits, Ponzi schemes, and bankruptcy this year, and it has completely shaken the crypto market and created fear in investors and crypto enthusiasts. Celsius has recently been in the headlines due to the resignations of authorities and the selling of their massive amount of crypto assets. Among all these, it is highlighted that three prominent executives of Celsius withdrew $56.12 million before announcing bankruptcy.Â
More Hurdles To Come For Celsius
Celsius is getting the spotlight of the cryptocurrency community after its bankruptcy in July, erasing nearly $1 trillion from the crypto market. According to a recent court filing of Financial Affairs, Celsius’ former CEO Alex Mashinsky, former CSO Daniel Leon, and CTO Nuke Goldstein withdrew a whopping amount of $56.12 million worth of crypto between May and June. The record hints that the funds were withdrawn before halting withdrawals and declaring bankruptcy. The Statement of Financial Affairs mentioned that these funds were cashed out from custody accounts of the firm and were in digital assets, including Bitcoin [BTC], CEL tokens [CEL], USDC, and Ethereum [ETH].
According to the report, Mashinsky sold nearly $10 million worth of crypto in May 2022. Leon cashed approximately $7 million (and an extra $4 million worth of CEL, which was collateral) between 27 May and 31 May. Nuke withdrew about $13 million (and an extra fund of $7.8 million worth of CEL, which was also collateral).
Celsius Chapter Is Not Ending Here
The reports mentioned above have confused the entire crypto industry and so the other executives of Celsius. However, the court filing highlighted that other officials, including Celsius’ current CEO, Chris Ferraro, didn’t make any significant transactions during and before the bankruptcy.
These documents are the latest to provide a spotlight on huge transactions made by three former executives of Celsius. The US trustee’s office previously appointed an independent investigator to examine each corner of Celsius, including the process of managing and storing funds of customers and the reason for being bankrupt.
An official from Celsius previously stated, “We will continue to rely on them to assist in preparing whatever requirements would be necessary to execute the final recovery plan as quickly as possible.” But now it seems that the revival plan is falling apart as Celsius has been trapped under the radar. Other officials, including the Chief Compliance Officer, Oren Blonstein, as well as the Chief Risk Officer, Rodney Sunada-Wong, were given a clean sheet.
In another court filing, the bankruptcy court has instructed Celsius to provide transparency to the Unsecured Creditors Committee (UCC), representing all its customers to whom Celsius owes money, about its financial level and process of cash management on a regular basis. Celsius is also ordered to provide its monthly budget, account statement, taxes, and proceeds from its bitcoin mining business. The court also ordered Celsius to take permission from UCC before making a transaction over $50K. The next hearing for Celsius’ bankruptcy case is scheduled on 7 October at 10 am E.T.
