Celsius' former CEO withdrew $10 million from the platform before it shut down

Celsius' former CEO withdrew $10 million from the platform before it shut down
A Celsius spokesperson claims the money was used to pay taxes, but there's a chance the company's founder will be required to return the funds

Celsius Network founder and former CEO Alex Mashinsky withdrew $10 million from the crypto platform before it suspended all operations, the Financial Times reports. A Celsius spokesperson claims that the former head of the bankrupt company funneled those funds to pay taxes, and that Maszynski and his family still have about $44 million in cryptocurrency frozen in their Celsius accounts.

In early June, Celsius, which had 1.7 million customers, said it was facing difficulties because of "extreme market conditions." The company began restructuring its business, hiring outside consultants and lawyers. On June 13, the company suspended all operations on the platform and filed for bankruptcy in early July. Celsius' liabilities exceeded its assets by $2.85 billion.

At the same time, Celsius representatives said that Maszynski's withdrawals in late May and early June had been planned in advance. In the next few days, Celsius will present details of these transactions in court as part of a more comprehensive disclosure of the company's financial transactions.

There is also the possibility that the former head of the company will be forced to return that $10 million to Celsius' accounts. Under U.S. law, payments to the company can be deferred for the benefit of creditors for 90 days prior to filing for bankruptcy.

Maszynski stepped down as CEO of Celsius on Sept. 27. Commenting on his resignation, he said he would continue to help the company reorganize and find the best solution for creditors.