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One of the culprits of the crypto liquidity crisis, Celsius has officially filed for bankruptcy. However, it is worth mentioning that Alex Mashinsky, the former CEO of this platform, was recently accused of prematurely dispersing $10 million.
Many sources nearby said that Celsius Network founder and CEO Alex Mashinsky “died” $10 million from his own crypto lending company just a few weeks before freezing customers’ accounts. and filed for bankruptcy.
This investigation said that Mashisky committed the above behavior in May of this year. And this is also the time when a series of customers withdraw from Celsius because of fear of a market downturn and the company’s not-so-positive financial situation.
Celsius Network freezes operations starting June 12, 2022, leaving hundreds of thousands of small and medium investors inaccessible to their savings. The company finally filed for bankruptcy in July with a $1.2 billion loss on its balance sheet.
Specifically, the debt and financial obligations this company has is that the company has $ 5.5 billion, while the actual assets are only $ 4.3 billion. Of which, user debt is $4.72 billion, CEL debt is $210 million, custody debt is $180 million, and other debt is $390 million.
Celsius’s most prosperous period is October 2021. At this time, Alex Mashinsky said that Celsius owns a fortune of up to 25 billion USD. The company’s strong bounce is largely explained by its unusually high interest rates, which hit the 18% mark and are much higher than some other cryptocurrencies.
The allegation that the founder of Mashinsky, who stepped down as chief executive officer last week, raised suspicions that the man knew in advance that Celsius was unable to return assets to customers and was quick to act. Set aside some money for yourself.
Details of Mashinsky’s transactions will be submitted to the court by Celsius Network in the coming days.
A spokesperson for Mashinsky said that he and his family still have $44 million in crypto assets frozen in Celsius. The founder of the platform also fully informed the Unsecured Creditors Committee before withdrawing funds in accordance with bankruptcy proceedings.
“In mid-to-late May 2022, Mr. Mashinsky withdrew one percent of the cryptocurrency in his account, most of which was used for state and federal taxes. My client has also repeatedly sent back an amount equal to the total withdrawn in May,” the spokesperson said.
“My client will continue to be committed to working with and uniting the community to plan for recovery, cryptocurrency return and full liquidity for all,” Mashinsky added.
It is possible that as much as $8 million of the assets Mashinsky took out was used to cover taxes arising from the income.
The remaining $2 million comes from Celsius’s CEL token. The person added that the withdrawal was pre-planned and related to Mashinsky’s estate planning.
Mashinsky, 56, co-founder and largest shareholder of Celsius in 2017 and the face of the company, appears in weekly YouTube video addresses where he delivers a background-liberating message finance from setting up a bank. Last week, he apologized to clients in his resignation letter, saying he was “deeply sorry for the difficult financial situation that members of our community are facing”.
Related: Celsius owes $2.8 billion, about to run out of money in October
Remember at the end of 2021, Celsius was valued at $ 3 billion when it raised $ 600 million in equity investments from US investment company WestCap and Canada’s second largest pension fund Caisse de Đépôt et position du Québec. While Mashinsky and the public are optimistic about this period, the company has consistently struggled with a weak internal system for managing assets. Sometimes even paying customers more interest than loan interest.
In 2 consecutive years 2021 and 2022, Celsius has suffered losses many times when investing in the wrong source. This was also a contributing factor to the company’s downfall. Last month, the Vermont financial regulator alleged that Celsius could have defaulted on its debt as early as May 13 of this year. Just days before freezing withdrawals, Celsius also tried to reassure customers that they had enough reserves to survive and claimed to be “at full speed”.
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