Celsius CEO Alex Mashinsky accused of trying to run amidst company bankruptcy

  • Celsius CEO Alex Mashinsky’s flight to Israel was reportedly halted by authorities at the airport.
  • The company’s liquidation issues remain at large, with no solutions offered yet and investors not looking to offer bail.

Celsius Network founder and CEO, Alex Mashinsky, is allegedly seeking a way out of the US after the firm’s scandalous liquidity shortage. 

Exactly two weeks ago, the crypto lending colossus paused all withdrawals, swaps, and transfers, citing “extreme market conditions.” Thereafter, the firm hired restructuring lawyers and contacted authorities to help resolve its issues. Celsius also announced that it has paused all its forms of social engagement to grant its predicament more focus.

Ironically, just hours before the withdrawals freeze announcement, Mashinsky called out Twitter user @mdudas for what he called falsifications. The Twitterer said there were rumors of locked accounts on Celsius, something Mashinsky called (in a deleted tweet) “FUD and misinformation.”

Three days after the withdrawal freeze, he re-appeared on Twitter, asking for time and patience from investors and clients.

Celsius executive trip cut short by authorities

Now, according to crypto investor Mike Alfred, the executive attempted to leave the US for Israel through Morristown Airport. He was, however, stopped by authorities, but it remains unclear whether he was arrested or just barred from traveling.  

Alfred now speculates that Mashinsky has already been contacted by the FBI, and questioned regarding Celsius’s troubles. He also says it is unlikely customers will be able to redeem the assets soon, noting:

It’s in the hands of the lawyers now, for better or worse.

Dawn Newton, COO of fraud prevention firm Netki, argued that Mashinsky might be safe in Israel. She says he lived there for most of his life and served in the Israeli army.

FYI: While the US has an extradition treaty with Israel there is a clause “An Israeli national may not be extradited except for an offense committed prior to becoming a national.

According to Alfred, Masinsky’s case shows a weakness in the “simple rule” of maintaining investors’ faith. Celsius began drawing huge investor concern in mid-May when its yields began dwindling. Reports now say investors are disinterested in bailing out the lending platform since it shows little signs of regaining its coveted prominence. 

“Banks are not your friends”

Other than regulators, the troubled firm has also drawn the attention of potential buyers. Rival lender Nexo and pro-crypto bank Goldman Sachs are among those that have offered Celsius a buyout. The firm has, however, not reacted to any of the offers.

The second offer is particularly shaky for Celsius, especially considering Mashinsky was not a fan of banks. In one of his many conferences, he once wore a branded T-shirt that read:

Banks are not your friends.

Note that the information on Mashinsky’s halted trip to Israel lacks any hard evidence as of this writing this. Meanwhile, CEL was trading at $0.79 at writing time, having plummeted 21.6 percent in the past day.

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