Ex-CEO Alex Mashinsky, ex-CSO Daniel Leon and CTO Nuke Goldstein pulled bitcoin, ether, USDC and CEL holdings from their custody accounts in May, before the company suspended all customer withdrawals.

Crypto lender Celsius’ top three executives withdrew $56.12 million in cryptocurrency between May and June 2022, right before the company suspended withdrawals and filed for bankruptcy, new court records show.

According to a Statement of Financial Affairs filed late Wednesday, former CEO Alex Mashinsky, former CSO Daniel Leon and CTO Nuke Goldstein withdrew the funds largely from custody accounts in the form of bitcoin (BTC), ether (ETH), USDC (USDC) and CEL tokens (CEL).

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, according to the document, one of several filed to the Bankruptcy Court for the Southern District of New York.

Mashinsky withdrew about $10 million in cryptocurrency in May 2022. Leon withdrew about $7 million (and an additional $4 million worth of CEL denoted as “collateral”) between May 27 and May 31. Goldstein withdrew around $13 million (and an additional $7.8 million worth of CEL also denoted “collateral”).

Celsius filed for Chapter 11 bankruptcy protection in July after it halted all user withdrawals citing “extreme market conditions” a month before.

Wednesday’s documents are the latest development around the beleaguered crypto lender as its bankruptcy case heats up. An independent examiner, appointed by the U.S. Trustee’s office, is currently investigating why Celsius fell apart and how it managed and stored customer deposits.

Mashinsky and Leon resigned from the lender within the last two weeks. Earlier this week, the Financial Times reported that Mashinsky withdrew $10 million in crypto before Celsius froze withdrawals.

Key members of the lender’s management talked about fresh restructuring plans that involved turning the firm’s debt into tokens and a potential pivot to crypto custody, according to audio recordings leaked to the media. However, the court is moving forward with auctioning off Celsius’ assets later this month.

Celsius’ Crypto Customers Face Big Obstacle in Trying to Claw Back Their Deposits.

The bankruptcy court ordered Celsius to update the Unsecured Creditors Committee (UCC), which represents all customers whom Celsius owes assets, about its financial status and cash management on a regular basis, according to another court document filed Wednesday.

The lender must disclose its monthly budget and cash balance, spending on wages, taxes among other figures, and various performance metrics about its bitcoin mining business and any proceedings from sales of BTC mined by the firm’s mining facilities.

The firm also must obtain permission from the UCC for any “critical vendor payment” above $50,000.

The next hearing for the bankruptcy case is scheduled for later this week, Oct. 7 at 10 am E.T.

Free legal advice:

If you are a victim, in this case, do not remain passive. The previous cases and experiences have shown that the owners and founders of this and similar projects have retained a great deal of investors’ assets for themselves. These individuals are liable to have their private assets confiscated as well to make the victims of their alleged fraudulent activities whole again. You, as a victim, should submit your claim to the presiding authorities to have a chance at retrieving your investments.

If you have any questions, please contact us.

Kind Regards,

Zoran Miljakovic

Attorney at Law