Celsius ex-CEO withdrew $10m before the lender collapsed: Report

Alex Mashinsky withdrew $10 million from Celsius before the lender froze withdrawals, sources say – did he know of the impending doom?
The revelation comes just days after he resigned from his role as CEO following the catastrophic collapse of one of the crypto industry’s titans.

Alex Mashinsky, the founder and ex-CEO of bankrupt crypto lender Celsius Network withdrew $10 million worth of crypto a few weeks before the company announced that it would freeze withdrawals, sources have revealed.

The sources, who spoke to Financial Times, revealed that Alex made the withdrawal in May this year. At the time, several clients were withdrawing their money from the lender as news of its tie-up with Terra’s LUNA and UST started doing the rounds.

A few weeks later on June 12, the lender froze withdrawals. In the months that followed, the house of cards that Alex had held up for years began to crumble, ending in the company filing for Chapter 11 bankruptcy in New York in mid-July.

The latest revelation adds to the mounting scrutiny on Alex, a man who rose to prominence in crypto by bashing the traditional financial system and hailing crypto (and Celsius) as the liberators. He held several AMAs on YouTube on a weekly basis, always donning his favorite black t-shirt with the message: “Banks are not your friends.”

(Image courtesy of CoinDesk.com)

And while the banks may not be your friends, neither was Celsius. The lender was engaging in all manner of fishy business, with Alex pushing for the most aggressive business tactics to deliver on his promise of sky-high yields. As FT reported a few weeks back, Alex even took over the trading strategy himself, and since he was a novice at trading, he ended up losing millions of dollars.

Making losses isn’t a crime in itself. However, Alex went on to lie to investors about the health of the company – and this is illegal. He would also use some of the funds injected by late-stage investors to pay off other clients as profits, in the fashion of a Ponzi scheme – also illegal. He even used some of the investors’ funds to pump the price of his company’s token, known as CEL – definitely illegal.

As CNM reported, he resigned last week. However, resignation won’t save him from scrutiny. Regulators are now taking on the crypto scammers – look at the case of Terra’s Do Kwon who is now a wanted fugitive in 195 countries. If the crypto industry is to go mainstream, Alex, Kwon, and the likes must be brought to justice.