Celsius founder and recently resigned CEO Alex Mashinsky when he appeared in a Celsius promotional video uploaded to YouTube. The video was deleted after the company imploded.Screenshot: YouTube
Three executives at crypto trading platform Celsius withdrew at least $40 million in cryptocurrency just before the company halted withdrawals for all users earlier this year, according to a financial disclosure form filed in New York’s bankruptcy court late Wednesday became.
Withdrawals by Celsius executives, first reported by CoinDesk, don’t look good from a visual perspective given how many users were blocked from withdrawing their funds during the liquidity crunch just a few months ago. Celsius indefinitely halted all withdrawals in June and filed for bankruptcy the following month, leaving users with nothing. Celsius owes users around $4.7 billion but doesn’t have the money to pay them.
The three executives who siphoned off the combined $40 million in crypto were former CEO Alex Mashinsky, former chief strategy officer Daniel Leon, and current CTO Nuke Goldstein. Mashinsky resigned as CEO in September but is still the focus of investigations into whether Celsius was anything more than a Ponzi scheme — something currently being investigated by over 40 states. Leon just resigned yesterday.
The Financial Times previously reported that Mashinsky pulled around $10 million from Celsius before the company collapsed, citing unnamed sources, but we now know that Leon and Goldstein also pulled their money out before the public knew there were any liquidity problems at Celsius. Leon has withdrawn at least $11 million, and Goldstein has withdrawn at least $20.8 million, including millions in Celsius token.
Gizmodo has uploaded the latest Celsius court filings totaling over 14,000 pages to the Internet Archive for anyone who really wants to delve into the bankruptcy proceedings. It seems that the file is so extensive because it seems to contain the names and recent transactions of every user on the platform.
Screenshot showing just some of the withdrawals made by the former Celsius CEO 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Curiously, Mashinsky’s wife Kristine appears to have withdrawn over $2 million in Celsius tokens on May 31, according to the documents.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% year-on-year. Bitcoin, the world’s most popular crypto, is currently trading at $20,175, down 63% year-on-year. 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 false. The reality is that Mr. Goldstein didn’t even withdraw a dollar in the four weeks leading up to the pause – in fact, he deposited over $90,000 in CEL tokens at the end of May, just three weeks before the pause. Most of the supposed “withdrawals” from our client’s account were actually regular transfers between their accounts and involved corresponding deposits. In fact, the year before the break, Mr. Goldstein had positive net deposits in Celsius (including interest), no withdrawals. Unfortunately, your account skews Mr. Goldstein’s position as he currently has millions in Celsius locked up, making him one of the company’s largest unsecured creditors. Nuke takes pride in its work of creating a secure platform for Celsius users and works tirelessly every day to restructure the company for the benefit of all of its creditors.
Update Oct 6 11:29am ET: Updated with a statement from Nuke Goldstein’s attorneys.