The founder of cryptocurrency lender Celsius Network allegedly withdrew $10 million in funds weeks before it collapsed.
Alex Mashinsky, then CEO, was reported by the FT to have taken the funds in ‘mid-to-late May’, with customer funds frozen from June 12th. The company filed for bankruptcy in July.
Unnamed sources told the paper that the withdrawal was pre-planned and part of Mashinsky’s estate planning.
A spokesperson for Celsius told the FT that the withdrawal was intended for the payment of state and federal taxes.
“In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totalled what he withdrew in May,” the spokesperson added.
They claimed that Mashinsky and his family still have $44m worth of crypto frozen on the platform.
A court will hear greater detail of the transactions in the coming days as part of a wider financial disclosure by the company.
Mashinsky could be forced to return the $10m as, under US law, in the 90 days leading up to a bankruptcy filing payments by a company can be reversed to benefit creditors.
Celsius had 1.7m customers and $25 billion in assets under management at the time of collapse. Its bankruptcy proceedings showed a $2.85 billion gap in its balance sheet, with the company holding $4.3bn of assets and $5.5bn of liabilities.