Here's How Celsius Executives Withdrew Millions Before Bankruptcy

Zinger Key Points
  • The U.S. Trustee's office is currently investigating why Celsius went bankrupt.
  • Lawyers have said that some transactions made by the executives marked as "withdrawals" may represent transfers.

Bankruptcy court documents filed by lawyers of Celsius CEL/USD reveal that top executives at the crypto firm withdrew millions of cryptocurrencies before it declared the suspension of customer withdrawals. 

The court filing alleges that Celsius' former CEO Alex Mashinsky, co-founder Daniel Leon and Chief Technology Officer Nuke Goldstein made a series of withdrawals totaling tens of millions of dollars.

Mashinsky withdrew $10 million in tokens between May and the bankruptcy filing in July. Mashinsky stepped down from his role in late September. 

Leon withdrew $7 million worth of tokens. On Oct. 5, Leon stepped down from his role. Similarly, Goldstein withdrew $13 million.

The lawyers have raised concerns that some transactions made by the executives marked as "withdrawals" may represent transfers from one Celsius account type to another.

Also Read: 'Mind-Boggling': Dogecoin Co-Founder Calls Out Bankrupt Celsius For Still Advertising 17% APY

In June, Celsius suspended withdrawals, swaps, and transfers from its platforms, stating severe market conditions. 

At the time, the crypto firm mentioned that the activity halt was meant to put the company "in a better position to honor, over time, its withdrawal obligations," presumably suggesting that the company was unable to fulfill all withdrawals.

Later in July, Celsius repaid its debt via DeFi protocol Maker MKR/USD reducing its liquidation price to $0.00. 

The U.S. Trustee's office is currently investigating why Celsius went bankrupt and how it managed and stored customer deposits.

However, the court is moving forward with auctioning off Celsius' assets later this month.

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