Three executives at crypto trading platform Celsius cashed out at least $40 million in cryptocurrency shortly before the company halted withdrawals for all users earlier this year, according to a financial disclosure form filed in New York bankruptcy court late Wednesday.
The withdrawals by Celsius executives, first reported by CoinDesk, don’t look good from an optics perspective, given how many users were stopped from being able to pull their money out during the liquidity crisis just a few months ago. Celsius halted all withdrawals indefinitely in June and filed for bankruptcy the following month, leaving users with nothing. Celsius owes roughly $4.7 billion to users but doesn’t have the money to pay them.
The three execs who pulled out the combined $40 million in crypto were former CEO Alex Mashinsky, former Chief Strategy Officer Daniel Leon, and current CTO Nuke Goldstein. Mashinsky resigned as CEO in September, but is still at the center of the investigation over whether Celsius was little more than a Ponzi Scheme—something that over 40 states are currently looking into. Leon resigned just yesterday.
The Financial Times previously reported that Mashinsky withdrew roughly $10 million from Celsius before the collapse of the company, citing unnamed sources, but we now know Leon and Goldstein were also pulling their money out before the public knew there were any problems with liquidity at Celsius. Leon withdrew at least $11 million, and Goldstein withdrew at least $20.8 million, including millions in the Celsius token.
Gizmodo has uploaded the latest Celsius court filing, which totals over 14,000 pages, to the Internet Archive for anyone who really wants to get into the nitty gritty of the bankruptcy case. It appears the filing is so large because it seems to have the names and recent transactions of every user on the platform.
Curiously, Mashinsky’s wife Kristine appears to have withdrawn over $2 million in the Celsius token on May 31, according to the documents. Mashinsky did not immediately respond to an email early Thursday.
The Celsius token is currently trading at $1.28, down roughly 78% from a year ago. Bitcoin, the most popular crypto in the world, is currently trading at $20,175, down 63% from a year ago. Ethereum, the second most popular coin, is currently trading at $1,360, down 62% from a year ago.
Goldstein’s lawyers said in a statement:
Your report that Mr. Goldstein withdrew millions of dollars in advance of the “pause” is flatly mistaken. The reality is that Mr. Goldstein did not withdraw even one dollar in the four weeks prior to the pause—to the contrary, he deposited over $90,000 in CEL tokens in late May, just three weeks before the pause. Most of the supposed “withdrawals” from our client’s account were, in fact, regular-course transfers between his accounts and involved corresponding deposits. Indeed, in the year before the pause, Mr. Goldstein had net positive deposits into Celsius (including interest), not withdrawals. Your account unfortunately distorts Mr. Goldstein’s position, as he currently has millions locked up in Celsius, making him one of the Company’s largest unsecured creditors. Nuke is proud of his work to create a secure platform for Celsius users, and has been working tirelessly day in and day out to help restructure the Company to the benefit of all its creditors.
Update, Oct. 6, 11:29 am ET: Updated with a statement from Nuke Goldstein’s lawyers.