Celsius executives cashed in $40m before halting withdrawals

Celsius founder and recently resigned CEO Alex Mashinsky appears in a Celsius promotional video uploaded to YouTube.  The video was deleted after the company implosion.

Celsius founder and recently resigned CEO Alex Mashinsky appears in a Celsius promotional video uploaded to YouTube. The video was deleted after the company implosion.
Screenshot: Youtube

Three executives of crypto trading platform Celsius cashed in at least $40 million in cryptocurrency shortly before the company halted withdrawals for all users earlier this year, according to a disclosure form financial statement filed Wednesday evening in New York bankruptcy court.

Celsius executive withdrawals, first reported by CoinDesk, don’t look good from an optical point of view, given the number of users who were prevented from withdrawing their money during the liquidity crisis just a few months ago. Celsius has halted all withdrawals indefinitely in June and filed for bankruptcy on next month, leaving users with nothing. Celsius must approx. $4.7 billion to users but does not have the money to pay them.

The three executives who withdrew the combined $40 million from crypto were former CEO Alex Mashinsky, former Chief Strategy Officer Daniel Leon, and current CTO Nuke Goldstein. Mashinsky stepped down as CEO in September but is still at the center of the investigation into whether Celsius was little more than a Ponzi scheme, something that has gone beyond 40 states are currently looking. Leon just quit yesterday.

The FinancialTimes previously reported that Mashinsky withdrew around $10 million from Celsius before the company collapsed, citing unnamed sources, but we now know that Leon and Goldstein also withdrew their money before the public knew there were liquidity problems at Celsius. Leon withdrew at least $11 million, and Goldstein withdrew at least $20.8 million, including millions in Celsius tokens.

Gizmodo uploaded Celsius’s latest court filing, which totals over 14,000 pages, to the Internet Archive for anyone who really wants to get into the nitty-gritty of the bankruptcy case. It seems that the folder is so large because it seems to contain the names and recent transactions of every user on the platform.

Screenshot showing some of the withdrawals made by the former CEO of Celsius in May 2022.

Screenshot showing some of the withdrawals made by the former CEO of Celsius in May 2022.
Screenshot: PACER

Curiously, Mashinsky’s wife, Kristine, appears to have withdrawn over $2 million in Celsius tokens on May 31, according to the documents. Mashinsky did not immediately respond to an email early Thursday.

The Celsius token is currently trading at $1.28, down about 78% from a year ago. Bitcoin, the most popular crypto in the world, is currently trading at $20,175, down 63% from a year ago. Ethereum, the second most popular coin, is currently trading at $1,360, down 62% from a year ago.

Goldstein’s attorneys said in a statement:

Your report that Mr. Goldstein withdrew millions of dollars before the “break” is flatly wrong. The reality is that Mr. Goldstein did not even withdraw a dollar in the four weeks before the break – on the contrary, he deposited over $90,000 in CEL tokens at the end of May, just three weeks before the break. Most of the so-called “withdrawals” from our client’s account were, in fact, regular transfers between his accounts and involved corresponding deposits. Indeed, in the year before the break, Mr. Goldstein had net positive deposits in degrees Celsius (including interest), not withdrawals. Your account unfortunately misrepresents Mr. Goldstein’s position, as he currently has millions locked up in Celsius, making him one of the company’s largest unsecured creditors. Nuke takes pride in its work to create a secure platform for Celsius users, and works tirelessly day in and day out to help restructure the company for the benefit of all of its creditors.

Update, October 6, 11:29 a.m. ET: Updated with a statement from Nuke Goldstein’s attorneys.

.

Add Comment