Before going bankrupt, Celsius’ top three executives cashed out $56 million in cryptocurrency.
Former CEO Alex Mashinsky, former CSO Daniel Leon, and CTO Nuke In May, Goldstein withdrew bitcoin, ether, USDC, and CEL holdings from their custody accounts before the company suspended all customer withdrawals.
According to new court records, the top three executives of cryptocurrency lender Celsius withdrew $56.12 million in cryptocurrency between May and June 2022, just before the company suspended withdrawals and filed for bankruptcy.
According to a Statement of Financial Affairs filed late Wednesday, former CEO Alex Mashinsky, former CSO Daniel Leon, and CTO Nuke Goldstein withdrew funds in the form of bitcoin (BTC), ether (ETH), USDC (USDC), and CEL tokens from custody accounts (CEL).
According to the document, which was one of several filed with the Bankruptcy Court for the Southern District of New York, over a dozen other executives, including the company’s Chief Compliance Officer, Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong, and new CEO Chris Ferraro, did not make any significant withdrawals during that time period.
In May 2022, Mashinsky withdrew approximately $10 million in cryptocurrency. Between May 27 and May 31, Leon withdrew approximately $7 million (plus an additional $4 million in CEL denoted as “collateral”). Goldstein withdrew approximately $13 million (plus an additional $7.8 million in CEL denoted as “collateral”).
Celsius filed for Chapter 11 bankruptcy protection in July, a month after it halted all user withdrawals due to “extreme market conditions.”
The documents released on Wednesday are the latest development in the beleaguered crypto lender’s bankruptcy case. The U.S. Trustee’s office has appointed an independent examiner to look into why Celsius failed and how it managed and stored customer deposits.
Mashinsky and Leon both left the lender in the last two weeks. The Financial Times reported earlier this week that Mashinsky withdrew $10 million in cryptocurrency before Celsius froze withdrawals.
According to audio recordings leaked to the media, key members of the lender’s management discussed new restructuring plans that included turning the firm’s debt into tokens and a potential pivot to crypto custody. However, the court plans to auction off Celsius’ assets later this month.
According to another court document filed Wednesday, the bankruptcy court ordered Celsius to provide regular updates to the Unsecured Creditors Committee (UCC), which represents all customers to whom Celsius owes assets, on its financial status and cash management.
The lender is required to disclose its monthly budget and cash balance, as well as spending on wages and taxes, among other figures, as well as various performance metrics about its bitcoin mining business and any proceeds from sales of BTC mined by the firm’s mining facilities.
In addition, any “critical vendor payment” in excess of $50,000 must be approved by the UCC.
The next hearing in the bankruptcy case is scheduled for Oct. 7 at 10 a.m. E.T.