Under American laws, payments by a company in the 90 days ahead of a bankruptcy can be "clawed back" to benefit creditors, the FT reports.
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Alex Mashinsky withdrew $10 million from Celsius Network — weeks before the crypto lender suddenly froze customer accounts, according to the Financial Times.
The founder of the bankrupt crypto lender — who stepped down as CEO last week following pressure from creditors — is facing questions over whether he knew Celsius was in trouble at the time of that transaction.
Hours before accounts were frozen back in June, Mashinsky had denied reports that users were having issues withdrawing their funds — and lashed out at "FUD and misinformation."
However, a spokesperson for the embattled entrepreneur pushed back — and said he and his family still have $44 million locked up within Celsius that they are unable to access, putting them in the same boat as thousands of others. They were quoted by the newspaper as saying:
"In mid to late May 2022, Mr Mashinsky withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes. In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totalled what he withdrew in May."
The $10 million withdrawal is now set to be scrutinized by the bankruptcy court — and Mashinsky could be forced to return it.
Under American laws, payments by a company in the 90 days ahead of a bankruptcy can be "clawed back" to benefit creditors, the FT reports.
All of this comes as Celsius Network faces pushback over plans to open withdrawals for some customers.
While the crypto lender wants to release $225 million to about 63,000 users, a U.S. trustee argues this move is premature — and it could "impact or limit distributions to other creditors" further down the line.
Court filings have previously confirmed that 300,000 customers have a balance of more than $100, and Celsius is currently grappling with a multibillion-dollar black hole in its finances.
