According to a report by Financial Times on Sunday, Alex Mashinsky, the founder of insolvent crypto lender Celsius who just stepped down as the company’s CEO took out $10 million from his account before pausing withdrawal in June.
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Alex Mashinsky Took Out $10 Million in May
On June 12, Celsius announced that it is freezing withdrawals from its platform due to extreme market conditions, while citing people with knowledge of the matter on Sunday, Financial Times recent report revealed that Mashinsky withdrew $10 million in May.
As per the report, a large portion of the money was used to pay state and federal taxes.
Meanwhile, Mashinsky and his family had up to $44 million worth of digital assets frozen in the platform even after taking out the $10 million, a spokesperson told Financial Times.
The spokesperson was quoted saying;
“In mid to late May 2022, Mr Mashinsky withdrew a percentage of cryptocurrency in his account, much of which was used to pay 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,”
In 2017, Alex Mashinsky co-founded Celsius after which its valuation shot up to about $3 million by the end of 2021, since the crash of the crypto market this year, many crypto firms especially the lending firms have been finding it uneasy to keep their heads afloat.
Like many other crypto lenders, Celsius paused withdrawals from its platform in June and further to this, it filed for creditors protection in July, the former CEO as well as a co-founder of the firm announced his resignation as Celsius CEO on September 27 this year.
Crypto critics along with the Vermont Department of Financial Regulation have accused Celsius of running a Ponzi scheme; this report may, however, raise more concern about the allegation.
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