Check out the biggest breaking crypto market updates for today:
Celsius Network Founder Withdrew $10M Ahead of Bankruptcy
According to a report from the Financial Times, Celsius Network founder and ex-CEO Alex Mashinsky withdrew $10 million dollars from the crypto platform just weeks before the company froze customer withdrawals and ultimately declared bankruptcy.
As part of a larger disclosure by the corporation of its financial issues, Celsius is scheduled to submit the details of Mashihnsky’s transactions in court in the upcoming days.
The disclosure will likely increase scrutiny and raise questions about when Mashinsky knew Celsius would be unable to give customers their assets back.
A spokesperson stated:
“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.”
Mashinsky’s decision to withdraw funds during the time sparked quite a lot of concern, with the crypto community asking if Mashinsky knew the company would be in financial straits following the market crash.
Mashinsky was already in hot water before this, which is why he stepped down from his Chief Executive role at Celsius last Tuesday. But the news emerging of his behavior just weeks before Celsius’ bankruptcy has raised eyebrows even more.
The obvious question is – when in relation to his withdrawal did he know Celsius would not be able to return client assets?
A spokesperson for Mashinksy said that he and his family still had $44 million dollars of crypto frozen with Celsius, just like all the other Celsius customers, and that had been disclosed during the bankruptcy proceedings. He also pointed out that Mashinsky had deposited funds that equaled what he had withdrawn to pay taxes.
“He remains committed to working with and uniting the community on a recovery plan that maximizes coin and liquidity for everyone,” Mashinsky’s spokesperson added.
Mashinsky co-founded Celsius in 2017 and has been the face of the company, appearing in a weekly video address on YouTube and promoting a message of financial liberation from the banking industry.
In late 2021, Celsius’ valuation reached $3 billion after raising $600 million in equity investments from US investment firm WestCap and Canada’s second-largest pension fund Caisse de dépôt et placement du Québec.
But the company struggled behind the scenes with what has been revealed as a weak internal system for managing assets – sometimes paying customers more interest than they earned from loans.
Celsius also suffered a series of investment losses in 2021 and 2022 that contributed to the company’s downfall, but were not disclosed to clients. Last month, Vermont financial regulators claimed that Celsisus became insolvent on May 13 of this year.
The company saw a huge outflow of assets in May as the crypto market was rocked by the collapse of TerraUSD and Luna, whose demise sparked a string of corporate failures across the crypto industry.
Days before Celsius froze withdrawals, the crypto lender reassured customers that it had sufficient reserves and declared that it was “moving full-speed ahead.”
Former telecom operator Mashinsky now faces the possibility of being forced to return the $10 Million he withdrew from Celsius right before it froze assets. Under U.S. law, his payments up to 90 days before the company goes bankrupt can be recovered to the benefit of all creditors.
About $8 million of the assets Mr. Mashinsky withdrew were used to fund taxes on the income the assets generated at Celsius, according to one source.
The remaining $2 million was denominated in Celsius native CEL tokens. The withdrawal was pre-planned and related to Mashinsky’s real estate plans, the official added.
Mashinsky is the largest shareholder in Celsius and says he is one of the largest bankruptcy creditors. Earlier this week, he apologized to his clients in his resignation letter, saying he was “extremely sorry for the difficult financial situation facing members of our community.”
Warner Music Group Launches Partnership With OpenSea
Warner Music Group – the mega-record label conglomerate that includes Cardi B, Madonna, Dua Lipa, and Ed Sheeran among its famous signed artists – announced on Thursday it is partnering with NFT marketplace OpenSea to accelerate its artists’ expansion into Web3.
The collaboration will grant Warner Music artists early access to new OpenSea products, improved discoverability on the NFT marketplace, and dedicated and featured portions of the OpenSea site for upcoming NFT projects.
Artists will also receive specialized support from OpenSea team members to aid both in the expansion of their Web3 fan bases, and in the onboarding of existing fan communities into the NFT space.
Warner’s Chief Digital Office Oana Ruxandra said in a statement:
“Our collaboration with OpenSea helps to facilitate these [fan] communities by unlocking Web3 tools and resources to build opportunities for artists to establish deeper engagement, access, and ownership,”
The very first NFT collection to come out of the partnership will come from Warner Records in collaboration with celebrity chef Jeremy Fall’s web3 startup, called “Probably Nothing.”
Fall confirmed to Decrypt late last week that the debut Warner Music/OpenSea collaboration will be a release of NFT Label Passes for “Probably A Label,” the Web3 record label he launched last month with Warner Records.
The NFT Label Pass will allow holders to license songs from a members-only community music library, to create and own stakes in community-generated, IP-backed virtual artists, to attend exclusive live events like artist meet-and-greets and dinners with music executives, and to access Probably A Label’s upcoming music drops.
Core to Probably A Label’s mission is harnessing Web3 technology to allow artists and their fans to reclaim music ownership rights. Fall believes Warner Music – a titan of the traditional music industry – is proving to be a great partner in that endeavor.
“They are the type of major label that is trying to enter the space the right way, and adapt to the current climate, what culture looks like now, “ Fall said. “They’re in favor of the artists and pushing the IP conversation forward.”
In addition to music-related benefits, the NFT label Pass will also grant holders access to Studio A and Studio B, which are IP incubators that allow participants to pitch projects leveraging their ownership of select blue-chip NFTs like Bored Apes and Cryptopunks – which the studio may choose to develop, finance, market, and cosign.
“It’s great that in the NFT space, people get IP ownership,” Fall said. “But if you don’t know what to do with that, it’s pretty useless.”
Other major record companies have raced to expand their Web3 presences and capitalize on Web3 related IP in recent months. In May, Universal Music Group signed a deal to allow its artists to release NFTs on music-centric NFT marketplace LimeWire. Earlier this month, Universal tapped Beyoncé’s music producers to helm Kingship, a virtual bande based on Bored Ape Yacht Club NFT artwork.
Coinbase Resolves Problem That Halted Payments From US Banks
Yesterday, crypto exchange Coinbase faced a technical issue that prevented it from processing transactions with US bank accounts for more than five hours.
Users were unable to make payments or initiate withdrawals with their bank accounts on Coinbase. However, they were still able to use their debit card or PayPal accounts to make direct purchases during the outage.
The issue has been fixed as of Sunday, according to Coinbase’s system status page.
A few hours prior, the company had said that, for unspecified technical reasons, “we are currently unable to take payments or make withdrawals involving US bank accounts. Our team is aware of this issue and is working on getting everything back to normal as soon as possible. You may use a debit card or PayPal account to make direct buys on your account should you wish.”
The issue was not the only problem in the broader crypto ecosystem this weekend – Solana suffered what it called a “major outage” – one that lasted more than six hours before being resolved, according to its website.
- Cardano Network Proves Resilient; Investors Happy - January 24, 2023
- Polygon Hard Fork Happening Soon… - January 16, 2023
- Leaked: Twitter Developing New ‘Coins’ Feature - January 15, 2023