7 critical events in the Celsius bankruptcy proceedings
7 critical events in the Celsius bankruptcy proceedings
- creditor, including private investors, still don't know how much of your assets you can get back and when
- Celsius fights to reconcile the operation of his remaining business, to deal with legal disputes and try to reimburse customers
The cryptocurrency loan Celsius reported bankruptcy in July after a month-long struggle with insolvency problems-and left liabilities of around $ 3 billion.
The lender's concerns led to extreme fear and uncertainty in relation to the stability of the cryptom market, since the customers were not sure whether they would ever see their crypto performances blocked on the platform.
Celsius, which was only born five years ago in 2017, gave interest rates on their digital assets and offered crypto loan programs. The best of the platform, according to the user, was that they contributed to earning high rewards for Bitcoin deposits.
It became a top election after the interest in crypto loans-basically banking for the crypto world- exploded in the past two years together with decentralized financial platforms. Now she has 100,000 creditors, some of whom have given cash without security to secure liabilities.
Even the billionaire Sam Bankman Fried, Alameda Research, is one of the 50 most important unsecured creditors of the lender.
The decline of Celsius showed the risks of similar platforms that enable customer deposits to transmit to parties without a lot of underwriting, and showed that excessively high returns are more of a gambling than a real return.
Below are seven significant events based on the bankruptcy of Celsius:
1. Investors apply for the recovery of their money to the insolvency court
Many of the 1.7 million customers of Celsius suffering from the collapse of the platform wrote letters to the court of the southern district of New York to help get their money back.
2. Celsius flip-flops when reinstalling ex-cfo
The lender applied for the former CFO Rod Bolger to hire business because of his “familiarity” to advise his bankruptcy proceedings. If Bolger had come on board, he would have received around $ 93,000 a month at a time when the company's creditors were still waiting for their payment. This plan was later reversed for no apparent reason, but followed a formal objection by investor Keith Suckno.
3. Vague plans for Bitcoin mining income reveals
Celsius was very interested in using his Bitcoin mining business to help with his restructuring. But both creditors and supervisory authorities were decided that the company was allowed to continue. Dan Besikof, insolvency consultant at the Loeb & Loeb law firm, told Blockworks that Celsius did not say exactly what the proceeds from the business were up to - and therefore "could monetize the coins and use the proceeds in a variety of ways."
4. The court approves Celsius' plan to sell mined bitcoins - reserved
Although the plan was such a controversial topic and the Ministry of Justice argued that Celsius' case was not transparent enough, the US bankruptcy judge Martin Glenn gave the lender the approval of reducing and selling Bitcoin in order to support his operations. However, he expressed concerns that the business would not be immediately profitable and found that this could be a "very wrong" choice.
5. Celsius, sued by a former asset manager, decides on a counterclaim
The Defi Startup Keyfi submitted a lawsuit against Celsius for allegations in July before the bankruptcy of making a Ponzi system and not to comply with a profit sharing agreement. Celsius replied in August with a counterclaim and argued that Keyfi and CEO Jason Stone had made cryptocurrencies from the company from the company. The controversial crypto lawyer Kyle Roche, who represents Keyfi, said Celsius used the opportunity "as a scapegoat for her organizational incompetence".
6. The cash is expected to be used up by October
estimates that were submitted by the Kirkland & Ellis law firm on August 14 show that the lender had $ 3.8 billion to tokens on July 29. But his finances could dry up by October due to operating costs, including employee payments worth almost $ 14 million. The restructuring costs alone will cost the first almost $ 40 million. However, a newer Submission " To obtain US dollars from the repayment of loans from the repayment of USD.
7. Application for return of $ 50 million to blocked crypto
on September 1st Celsius
The debtor's assets are considered the bankruptcy mass. . . The contribution "7 Critical Events in the Celsius Bankruptcy Case" is not a financial advice.