Celsius Executives Cashed Out Shortly Before Bankruptcy

Two executives of beleaguered cryptocurrency lender Celsius appear to have withdrawn millions of their own investments before the company suspended withdrawals and filed for bankruptcy, new court filings show.

According to a statement of financial affairs filed in New York bankruptcy court late Wednesday, former CEO Alex Mashinsky and former chief strategy officer Daniel Leon made multiple withdrawals from their cryptocurrency accounts in May, days before the company halted all such transactions.

Mashinsky and related parties withdrew approximately $10 million worth of bitcoin, ether, USD coin and Celsius’ CEL token, according to the documents. Leon may have withdrawn between $2 and $7 million.

Forbes previously reported that CTO Nuke Goldstein also made withdrawals.

His lawyers, however, disputed this interpretation of the transactions listed in the filings. “The reality is that Mr. Goldstein did not withdraw even one dollar in the four weeks prior to the pause—to the contrary, he deposited over $90,000 in CEL tokens in late May, just three weeks before the pause,” wrote Avi Weitzman and Leo Tsao of the Paul Hastings law firm in Washington in a statement to Forbes. “Most of the supposed “withdrawals” from our client’s account were, in fact, regular-course transfers between his accounts and involved corresponding deposits. Indeed, in the year before the pause, Mr. Goldstein had net positive deposits into Celsius (including interest), not withdrawals.”

Mr. Goldstein “currently has millions locked up in Celsius, making him one of the Company’s largest unsecured creditors,” they added.

The court documents also revealed the annualized salaries of top executives, with Mashinsky and Leon earning $1 million and Goldstein making over $300,000.

Celsius has become one of the most high-profile casualties of the latest crypto meltdown. In July, the cash-strapped company filed for bankruptcy. The embattled lender owes customers nearly $4.7 billion in crypto. Its remaining assets will soon be up for auction. Celsius will have a final bid deadline of Oct. 17, with an auction if necessary on Oct. 20, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Last week, Mashinsky submitted his resignation, saying his “role as CEO has become an increasing distraction.” On Oct.4, Leon also stepped down.

Updated Oct. 6 with comment from lawyers for Goldstein, disputing the interpretation of financial transactions shown for him in the documents as withdrawals; reducing potential withdrawals by Leon.