Celsius Founder Withdrew $10M Before Freeze to Pay Taxes: Report

Alex Mashinsky reportedly used $8 million from the withdrawn funds to pay his own state and federal taxes

article-image

Alex Mashinsky, Celsius CEO; Source: Shutterstock

share

key takeaways

  • Details about his withdrawals will soon be submitted in court
  • His transactions are linked to estate planning, according to the Financial Times

Less than a week after Celsius founder Alex Mashinsky stepped down as CEO, a new report revealed he withdrew $10 million from the crypto lender shortly before customer funds were frozen on its platform.

Mashinsky’s withdrawals took place sometime between mid to late May, the Financial Times reported on Sunday. It isn’t clear whether the entire amount was withdrawn at once or in separate transactions. 

Even after the withdrawals, cryptoassets worth $44 million belonging to Mashinsky and his family are still stuck in Celsius, a spokesperson for the former CEO told the outlet.

Celsius didn’t return Blockworks’ request for comment by press time.

On June 12, Celsius paused transfers on its platform due to “extreme market conditions,” worrying its 1.7 million customers about their funds being locked up for an uncertain period of time. The lender filed for bankruptcy a month later, leaving it with $5.5 billion in dues to clients and creditors.

Since its insolvency, Mashinsky and other insiders have been investigated by Celsius’ unsecured creditors committee (UCC) over their conduct and asset deployment decisions. 

Around 80% of the $10 million in withdrawals, which he voluntarily revealed to the UCC, were reportedly pre-planned and used to pay state and federal taxes. The remainder amount withdrawn was Celsius’ native token CEL. His withdrawals are said to be linked to estate planning.

Mashinsky’s withdrawals are expected to escalate scrutiny of the former CEO and call into question whether he knew Celsius would reach a stage where customers wouldn’t be able to recover their funds, the Financial Times noted.

Celsius’ customer funds are still frozen. Currently, the Department of Justice is ensuring this continues until the independent examiner, Shoba Pillay, completes her investigation. 

The lender will submit Mashinsky’s transaction details in court in the coming days as part of the process to divulge internal financial information, the news outlet said.

In his resignation letter, Mashinsky said he regretted that his role as CEO had “become an increasing distraction” and that he was “very sorry” about the financial position of the company.

He is currently a director at the firm.

The next Celsius hearing is scheduled for Thursday, Oct. 6.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

The House on Thursday passed the CLARITY Act, a landmark cryptocurrency market structure bill

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others

article-image

Momentum’s back — BTC leads, risk assets follow

article-image

Ondo Finance’s acquisition of blockchain development company Strangelove follows its buy of Oasis Pro