The US Trustee Office believes that there are questions concerning the operation of Celsius Network, its financial health, and how it was allowed to go into bankruptcy.
Celsius Network filed for Chapter 11 bankruptcy protection in July after citing extreme market volatility leading to liquidity issues. As part of the ongoing hearing, the United States Trustee has filed a motion with the US Bankruptcy Court for the Southern District of New York to appoint an independent examiner. It can be recalled that Shara Cornell, a representative of the Office of the Trustee, was in strong opposition to Celsius’s motion to access its mined Bitcoins to fund operations.
According to Cornell, Celsius has not been transparent with her office as the embattled crypto firm has failed to submit sufficient information including specifics about cost concerning the mining expansion which is still in operation.
Also, there is no understanding between customers, parties in interest, and the public in terms of the actual amount held and where it is held by the Debtors.
In response to this, she disclosed that her office was considering an independent examiner. The US Trustee Office believes that there are questions concerning Celcius’s operation, its financial health, and how it was allowed to go into bankruptcy.
An independent examiner will, therefore, provide unbiased answers from all angles and provide important transparency issues in the case.
“An independent examiner is necessary here to investigate and report clearly and understandably on the Debtors’ business model, their operations, their investments, their lending transactions, and the nature of the customer accounts to ensure public confidence in the integrity of the bankruptcy system and to neutralize the inherent distrust creditors and parties in interest have in the Debtors,” said the US Trustee.
The US Trustee also noted that Celsius took a loan from a third party. However, the crypto lending firm has failed to provide related information including the collateral involved, who the lender was, and the kind of loan issued. This was disclosed after the lender had said it could not return the collateral. Interestingly, nothing about it was found in the Mashinsky Declaration.
The US Trustee has also said that the customers of the company do not trust it, and have made their feelings clear in filings published in the court docket.
A tweet from Celsius’ unsecured creditors opposes the decision for an examiner as they believe that this can cost them millions. According to them, Celsius should rather cut down on costs.
Celsius filing for bankruptcy heavily affected the crypto market with the likes of Bitcoin, Ethereum, etc recording massive lows from their all-time high.
Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
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