- The top three executives of Celsius withdrew $56.12 million in crypto.
- The U.S. Trustee’s office recruited an examiner to review Celsius’ failure.
- Alex Mashinsky was accused of stealing $10m in cryptocurrencies earlier in the week.
The top three executives of Celsius Network had reportedly cashed out approximately $56.12 million in cryptocurrency prior to the bankruptcy incident.
New court records show that between May and June 2022, just before the company stopped making withdrawals and filed for bankruptcy, the top three executives of the cryptocurrency startup Celsius withdrew $56.12 million in cryptocurrency.
While Daniel Leon, former CSO of Celsius cashed out roughly $7 million between May 27 and May 3, former CEO Alex Mashinsky withdrew about $10 million in bitcoin in May 2022.
According to the Statement of Financial Affairs released late Wednesday, Mashinsky, Leon, and Celsius CTO Nuke Goldstein withdrew the money mainly in the form of Bitcoin (BTC), Ether (ETH), USDC, and Celsius (CEL) tokens from custody accounts.
The executives stopped withdrawing and filed for bankruptcy on June 5, days after cashing out their extensive cryptocurrency holdings.
After suspending all customer withdrawals a month earlier due to “extreme market conditions,” Celsius filed for Chapter 11 bankruptcy protection in July.
The documents released on Wednesday represent the most recent steps in the troubled crypto lender’s bankruptcy case. The U.S. Trustee’s office hired an independent examiner to investigate how Celsius handled and stored customer money and the reasons for its failure.
According to a court document submitted on Wednesday, the bankruptcy court mandated that Celsius should regularly notify the Unsecured Creditors Committee (UCC), which stands in for all clients to whom Celsius owes assets, on its financial status and cash management.
Additionally, the document read that the lender must disclose its monthly budget, cash position, payroll and tax expenditures, several performance indicators about its bitcoin mining business, and any revenue from the sale of bitcoin generated by the company’s mining facilities.
Also, before making any “essential vendor payments” of over $50,000, the crypto business needs to get the UCC’s approval.
Reportedly, Alex Mashinsky and Daniel Leon have left the crypto company within the past two weeks. Before Celsius banned withdrawals, Alex Mashinsky was charged for taking $10 million in crypto earlier last week.