Former CEO of bankrupt cryptocurrency lender Celsius Alex Mashinsky arrested as part of an investigation into the collapse of the company, writes RBC Crypto with reference to Bloomberg.
At the same time, according to court documentsThe US Securities and Exchange Commission (SEC) also filed a lawsuit against Mashinsky and company.
Celsius was one of several major crypto companies that collapsed last year. The company gained popularity thanks to high interest rates on deposits in digital assets. The native CEL token, which is still traded on several crypto exchanges, was recognized as a security in the lawsuit, its quotes fell by 7% after the publication of the news, according to the OKX exchange.
Celsius’ problems began in June 2022, when the company suspended all withdrawals and transfers between accounts due to “extreme market conditions.” In July, the platform announced the dismissal of 150 employees, began restructuring the business and filed for bankruptcy.
In mid-August, it became known that Celsius Network’s debts exceeded its assets by $2.85 billion. The amount of funds missing from the platform for payments to creditors turned out to be almost 2.5 times more than was declared when filing for bankruptcy, when the shortage of funds was estimated at $1.2 billion.
In February, Celsius and its creditors began litigation to recover millions of dollars of funds that creditors say were illegally withdrawn from the company by Mashinsky himself, his wife and other former top managers. The documents allege that they manipulated the price of the CEL token to their advantage and made “careless, reckless and sometimes self-serving investments” that resulted in Celsius losing more than $1 billion in a year.
As it became known in October, Mashinsky withdrew $10 million from Celsius before all operations on it were suspended. The representative of the company claimed that these were pre-planned payments and the ex-head of the bankrupt crypto lender used these funds to pay taxes.
Source: Cryptocurrency
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