By
Bhushan Akolkar
April 26th, 2024
Notably, Alex Mashinky and other executives were revealed to have withdrawn as much as $27 million in two tranches just before the firm declared its bankruptcy.
Alex Mashinsky, the former Chief Executive Officer (CEO) of the embattled crypto lending platform Celsius Network, has continued to cash out funds in what some critics have called ‘dumping’. As reported by Coindesk citing data from the crypto analytics platform, Nansen, Mashinsky has withdrawn close to $1 million in CEL and USDC with the funds siphoned to Uniswap and Metamask wallets respectively.
The wallets keeping the funds have been confirmed to be Mashinsky’s and the funding has been coming from his previously known 6 wallets.
That the veteran crypto entrepreneur could be withdrawing funds indicates that the liabilities of Celsius Network are non-transferable, a significant benefit of the defining corporate laws in the US. As the founder and chief driver of the Celsius Network brand since its inception, the liberty to still be in control of such enormous funds seems to be draining the platforms’ users and the entire community.
“Alex Mashinsky is such a cartoonish villain. After getting called out for stealing money from his company on the brink of bankruptcy, he starts dumping hundreds of thousands of dollars of $CEL tokens across multiple wallets,” said Coffeezilla, an outspoken analyst that exposes scams on YouTube.
Alex Mashinsky is such a cartoonish villain. After getting called out for stealing money from his company on the brink of bankruptcy, he starts dumping hundreds of thousands of dollars of $CEL tokens across multiple wallets.
He's dumping I write this, last trade 3 min ago) pic.twitter.com/Ugg9Q7yDTZ— Coffeezilla (@coffeebreak_YT) October 11, 2022
There have been quite a lot of eyebrows raised by industry stakeholders with respect to the conduct of Celsius Network’s former executives as it concerns the movement of funds prior to and during the company’s declared bankruptcy. Notably, Alex Mashinky and other executives were revealed to have withdrawn as much as $27 million in two tranches just before the firm declared its bankruptcy.
While the account of the funds has not been detailed, the move generally unsettles the company’s creditors, the majority of whose funds are still stuck on the platform with withdrawals halted.
Redemption for the Celsius CEO and the Company
With the US bankruptcy court now in charge of the entire liquidity crisis of Celsius Network, the nature of redemption that can be sought will hinge on the solutions that come with the most minor strain and give as many users as possible a significant portion of the deposits back as possible.
The petition to enable ‘Premature’ withdrawals has been objected to by the Trustee lawyers.
“At this juncture, there are too many questions regarding the debtors’ cryptocurrency holdings to approve any withdrawals or sales,” attorneys for the Trustee’s office wrote in the objection. “Those questions arise both from the debtors’ lack of transparency … [and] the Debtors’ failure to file schedules and statements of financial affairs.”
While the timeline is yet to be determined for the likely withdrawals, the move will depend on the report on Celsius’ financial management and handling of customer accounts as ordered by bankruptcy judge Martin Glenn. The information is being handled by an independent examiner and is expected by mid-November.