Mashinsky had already put his Austin, Texas property that was acquired in 2021 with Celsius proceeds, on sale for about $2.49 million.
The former Celsius Chief Executive Officer (CEO) Alex Mashinsky faces more financial hurdles after United States Judge Jed S. Rakoff ordered his assets to be frozen as the criminal case with the Department of Justice (DOJ) continues. According to court filings, Mashinsky and any of his representatives have been ordered not to sell, transfer, or pledge any of his assets. Notably, Mashinsky’s funds in Goldman Sachs Group Inc (NYSE: GS), Sofi Bank, Sofi Securities, and Merrill Lynch have been restrained by the court order.
As a result, the financial institutions holding the Mashinsky funds and other assets have been informed to take notice of the court order, in order to facilitate the Celsius liquidation plan.
Additionally, Mashinsky’s real estate in Austin, Texas that was purchased on June 10 2021 has also been restrained by the court order. Moreover, Mashinsky had already listed the Texas house for sale through Zillow for about $2.49 million.
This Austin house is being sold by Alex Mashinsky, founder and CEO of bankrupt crypto company Celsius. He bought it only a year ago.https://t.co/TYbGmYEGq4 pic.twitter.com/7OACiuAwZN
— Austin Ideas (@atxideas) August 6, 2022
Notably, Mashinsky was released on a bail of $40 million after he pleaded not guilty on several charges. Meanwhile, the prosecutors are perusing Celsius documents and videos that Mashinsky had made during his tenure as the CEO. Furthermore, the prosecutors believed Mashinsky provided false statements regarding the Celsius token (CEL) in a bid to inflate the underlying value.
What Next for the Celsius Creditors and Mashinsky Case
Celsius filed for Chapter 11 bankruptcy protection in the United States after it reported heavy losses incurred during the crypto winter in June last year. As of May 2022, the company had lent out $8 billion to clients and had almost $12 billion in assets under management (AUM). By the time of its collapse, Celsius had about 1.7 million customers and offered annual yields of up to 17 percent.
According to the bankruptcy documents, Celsius owed its customers up to $4.7 billion, but only had about $167 million in cash meant to facilitate its bankruptcy proceedings. Although the comps has sold part of its assets – including GK8, a digital asset custody platform, to Galaxy Digital Holdings – the ruling that customers deposit are Celsius property has a detrimental impact on the depositors.
In mid-July, Celsius agreed to settle $4.7 billion with the Federal Trade Commission, which was described as one of the settlements in FTC history. The announcement was a major shift for the Celsius creditors and customers who had their funds trapped since the firm closed withdrawals in July last year. Moreover, the Celsius creditors are currently voting on whether to sell assets to buyer consortium Fahrenheit.
Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology.
Let us all WIN!
