Celsius, the cryptocurrency lender, has gone bankrupt and officially announced it. The normal procedure in this type of situation is that the rest of the company’s funds must be frozen. But before Celsius’s accounts were frozen, its founder and former CEO, Alex Mashinsky, withdrew $10 million from the company’s accounts.
Celsius: an inevitable bankruptcy
The collapse of the Terra ecosystem has had a devastating impact on the cryptocurrency market. During this slaughter, 60 billion dollars were erased from the market. Thus, several companies have left feathers there, in particular the virtual currency lender Celsius.
Its CEO Alex Mashinsky has also announced an interruption of all withdrawal and transfer operations on its platform in June.
This interruption also affected swaps. For the CEO of this company, the shutdown of all operations was necessary because the conditions in the digital asset market had become too extreme and volatile.
In the process, Alex Mashinsky also announced that Celsius was doing very well financially and that the company’s customers should not worry.
What if you could get your hands on the latest crypto nuggets and NFTs?
However, some time later, the company filed for Chapter 11 bankruptcy protection in the court for the Southern District of New York.
According to information in subsequent filings, the company’s balance sheet showed a deficit of $1.2 billion.
Also, taking into account the documents filed with the court, the company Celsius still held, 4.3 billion US dollars in assets and 5.5 billion US dollars in liabilities.
After receiving and analyzing all of this information, the court for the Southern District of New York should order the freezing of all of the company’s accounts. But long before that decision was made, founder and former CEO Alex Mashinsky withdrew US$10 million.
On September 27, former Celsius CEO Alex Mashinsky withdrew US$10 million before the Southern District of New York court froze the accounts.
According to’crypto news as well as the information given by its spokesperson, the US$10 million was used to pay state and federal taxes.
The spokesperson goes further in his statements by announcing that the ex-CEO and his associates still have in their possession, more than 44 million US dollars of digital assets after the withdrawal.
Incidentally, during the bankruptcy proceedings, Mashinsky voluntarily disclosed to the Official Unsecured Creditors Committee (UCC), the digital assets he held at Celsius.
Celsius’ bankruptcy is already a thing of the past. All eyes are on its future owner.
According to some behind-the-scenes reports, Sam Bankman-Fried is in pole position to make an offer to buy the company. This, because the latter would be in the process of raising 1 billion US dollars in funds.
However, it should be noted that Sam Bankman-Fried has not made any public statement regarding the takeover of Celsius at this time.