CORRECTION (Oct. 6, 18:35 UTC): Corrects figures throughout based on documentation provided by CTO Nuke Goldstein’s lawyers, who showed that most of his apparent withdrawals were sent to other accounts at Celsius. Corrects range.
CORRECTION (Oct. 6, 12:18 UTC): Corrects figure in the headline and first paragraph to $42 million.
Crypto lender Celsius’ top executives withdrew a little over $17 million in cryptocurrency between May and June 2022, right before the company suspended withdrawals and filed for bankruptcy, new court records show.
According to a Statement of Financial Affairs filed late Wednesday, former CEO Alex Mashinsky and former CSO Daniel Leon withdrew the funds largely from custody accounts in the form of bitcoin (BTC), ether (ETH), USDC (USDC) and CEL tokens (CEL).
Over a dozen other executives, including the company’s Chief Compliance Officer, Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong and new CEO Chris Ferraro did not make any significant withdrawals during that time period, according to the document, one of several filed to the Bankruptcy Court for the Southern District of New York.
Mashinsky withdrew about $10 million in cryptocurrency in May 2022. Leon withdrew about $7 million (and an additional $4 million worth of CEL denoted as “collateral”) between May 27 and May 31.
Initially, it appeared that current CTO Nuke Goldstein withdrew around $13 million (and an additional $7.8 million worth of CEL denoted “collateral”). However, matching transactions through different affiliated entities suggest that in reality, Goldstein moved his holdings to and from different accounts, all maintained with Celsius. The net amount he took out from his personal account is around $550,000, mostly in ETH. A related party of Goldstein, Bits of Sunshine LLC, withdrew a combined $5.7 million in CEL on May 9, 11, 13 and 25 from a custody account. The majority of these funds were likewise deposited into his personal account at Celsius, which he put up as collateral.
Wednesday’s documents are the latest development around the beleaguered crypto lender as its bankruptcy case heats up. An independent examiner, appointed by the U.S. Trustee’s office, is currently investigating why Celsius fell apart and how it managed and stored customer deposits.
Mashinsky and Leon resigned from the lender within the last two weeks. Earlier this week, the Financial Times reported that Mashinsky withdrew $10 million in crypto before Celsius froze withdrawals.
Key members of the lender’s management talked about fresh restructuring plans that involved turning the firm’s debt into tokens and a potential pivot to crypto custody, according to audio recordings leaked to the media. However, the court is moving forward with auctioning off Celsius’ assets later this month.
The bankruptcy court ordered Celsius to update the Unsecured Creditors Committee (UCC), which represents all customers whom Celsius owes assets, about its financial status and cash management on a regular basis, according to another court document filed Wednesday.
The lender must disclose its monthly budget and cash balance, spending on wages, taxes among other figures, and various performance metrics about its bitcoin mining business and any proceedings from sales of BTC mined by the firm’s mining facilities.
The firm also must obtain permission from the UCC for any “critical vendor payment” above $50,000.
The next hearing for the bankruptcy case is scheduled for later this week, Oct. 7 at 10 am E.T.