” Objection your honor ! – Since July, the cryptocurrency lender Celsius is officially under Chapter 11 bankruptcy protection. The company is therefore under the surveillance of a Federal Court, in this case that of the Southern District of New York. And it is Judge Martin Glenn who temporarily has the destiny of the company in his hands and who will supervise the reorganization plan and payment of debts. But things are not simple in this case between the multitude of plaintiffs, certain activities ” potentially illegal of Celsius and the multiple appeals of the defense. And the CEO, Alex Mashinskyeven recently ceded his post, which does not help. Judicial chronicle of an extraordinary procedure.
Celsius wants to sell $23 million worth of stablecoin from its reserves
Several weeks after the crypto lending company filed for bankruptcy, its lawyers made a somewhat peculiar request to the court. Celsius has indeed asked to be able to sell its reserves of stablecoins – 11 different according to the file. All for a total amount of 23 million of dollars. The lender’s teams made it clear that it would be ” an effective means of generating cash for help fund debtor operations “. The court sent everyone back to the October 6 for a response to this query. But at the same time, a new element has been added to the file with the appointment of a ” examiner », that is to say of a « independent observer by the judge.
His mission will be toaudit the accounts of the company but also to take stock of the crypto reserves. And Shoba Pillay – the person in question – will also have the heavy burden of write a report on the management of customer accounts, the state of the mining activity and on the general taxation of the company. Shoba Pillay is a regular in financial affairs, having worked for eleven years as an Assistant United States Attorney in the Northern District of Illinois before continuing her activities with law firms specializing in the field.
>> Don’t want to be taken for an apple? Earn Solid Returns with AscendEX Earn (Commercial Link) <<
Several states including Texas and Vermont oppose it for lack of clarity
But even before the hearing of October 6 and the conclusions of Me Pillay, objections have been formulated by different parties. These are the Texas Investor Protection Agency (Texas State Securities Board) and the Texas Department of Banking (Texas Department of Banking), but also the Vermont Department of Financial Regulation (Vermont Department of Financial Regulation). Lawyers from both states brought to the judge’s attention their concerns that ” Celsius uses the proceeds from the sale [des stablecoins] to resume potentially illegal activities “.
Indeed, no one knows what the company planned to do with the recovered funds. And the plaintiffs rely on a collaborative investigation conducted by 40 state regulators on the activities of Celsius. And we are already talking activities potentially not recorded, fraud and market manipulation “. Finally, a last participant in this file also opposed this sale, it is the federal administrator of bankruptcy files (United States Trustee Program). It is a body of the Department of Justice which supervises large bankruptcy files and whose word weighed heavily in the appointment of the observer.
Here is what we can say at the end of September and while waiting for the hearing on October 6. Plaintiffs agree that Celsius shows ” an obvious lack of clarity when the company’s lawyers suddenly became very discreet in the media. Crypto lenders are obviously in the collimator American justice who wishes to avoid – at all costs – a new bankruptcy in crypto.
The game looks tight for Celsius. Instead, come enjoy XX% annual returns on AscendEX Earn. Register today on the AscendEX platform (commercial link).
