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Oct. 3, 2022, 12:29 p.m. EDT

Celsius Network’s former CEO reportedly withdrew $10 million before bankruptcy

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By Anushree Dave

Crypto lender Celsius Network founder and former chief executive Alex Mashinsky withdrew $10 million before the company froze customer withdrawals and declared bankruptcy, the Financial Times reported on Sunday.

Mashinsky allegedly withdrew $10 million in May, before withdrawals were frozen for users on June 12, the FT reports using sources familiar with the matter. Accounts were frozen in June due to customer concerns over extreme market conditions and the firm’s financial instability.

“In mid to late May 2022, Mr Mashinsky withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes. In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totaled what he withdrew in May,” a spokesperson for Mashinsky told the FT. The spokesperson also said that Mashinsky and his family still had $44 million worth of crypto frozen on Celsius.

Related : Celsius customers write pleas to bankruptcy court to get crypto back: ‘This is an emergency situation, simply to keep a roof over my family and food on their table.’

Mashinsky, who co-founded the lender in 2017, resigned as CEO on Sept. 27. Celsius was a popular crypto lending platform that had 1.7 million users and $25 billion in assets under management. The firm had reached a $3 billion valuation by the end of 2021, but filed for chapter 11 bankruptcy by July.

Mashinsky didn’t immediately respond to a request for comment via Twitter. There was no immediate response to a request for comment from a Celsius bankruptcy attorney.

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