This is a quick update about the status of the chapter 11 bankruptcy filled by Celsius Network earlier this year in June 2022, and also the plan proposed by the Bitcoin veteran investor Simon Dixon that could possibly fix this mess caused by Celsius CEO Alex Mashinsky and other Celsius executives deceiving public about what Celsius company actually is and what happens with coins and tokens deposited in the app.
In the meantime, Simon Dixon is fighting along with the community of depositors, borrowers, and lenders. With that being said, if you are one of the depositors and want the best case scenario for everyone who is a victim to come forth please join Simon Dixon and others on YouTube and Twitter where Simon discusses and forms the best future plan with others.
Simon Dixon YouTube – https://www.youtube.com/c/SimonDixonBF
Simon Dixon Twitter – https://twitter.com/SimonDixonTwitt
Celsius Bankruptcy Official Court Hearing October 2022
In a recent filing, Celsius Bankruptcy claimed that its customers had “loaned” money to the company, not “deposited” it. This means that customers who had borrowed money from Celsius must be listed as creditors in the bankruptcy case. This is a critical point because Celsius has been using the word “deposit” in its marketing campaigns. Simon Dixon, however, disagreed with this characterization. In the filing, Celsius listed over a hundred thousand creditors with Simon Dixon being the 21st largest depositors of crypto in the app.
Celsius’s bankruptcy filing also includes extensive information on its executives. The documents show that its ex-CEO, Alex Mashinsky, cashed out $10 million of crypto-assets before the filing began. In addition to this, the bankruptcy documents reveal that Mashinsky quit the company in September. While this news may be good news for the company’s creditors, it will not ease their pain. This is why the US trustee of the case, William Harrington, objected to Celsius’ redaction motion, saying that the bankruptcy case requires disclosure of all relevant information.
Celsius filed for Chapter 11 bankruptcy protection 89 days after introducing the custodial wallet. This means that any funds that were transferred 90 days before the filing date might be subject to clawback under U.S. law. Although there was no ruling on this issue at this hearing, the various parties were able to provide their feedback during the three-hour hearing. However, it remains unclear whether Celsius will be able to get its money back. If the court grants Celsius’s motion to withdraw the funds, the assets will be returned to the custodial account holders.
After the company filed for bankruptcy, a creditors committee called UCC was formed. The group is made up of people who lost money through Celsius, including those who made deposits in the company. The committee aims to help these creditors recover their crypto assets. As of now, the company has more than a hundred thousand creditors, including customers and lending counterparties. FTX’s CEO Sam Bankman-Fried has joined the group as a creditor. Celsius has been one of the biggest players in the crypto lending market, with over $8 billion in loans to its customers and $12 billion in assets under management as of May. It had 1.7 million customers as of June. It also offered interest-bearing accounts, with yields as high as 17 percent.
The case is still in its early stages, and the company will have to file a report within a month. It is expected that the court will order an independent examiner to examine Celsius’s finances. The independent examiner is set to deliver a report on December 10. Celsius also asked the bankruptcy court to approve bidding procedures for its assets, but its motion failed to identify which assets will be sold. Additionally, the company’s motion is vague on whether or not it intends to continue its crypto mining business.
In addition to the DOJ’s request, several other parties have asked for additional oversight measures. Some have called for the appointment of a Chapter 11 trustee and state securities regulators. The DOJ and state securities regulators are also investigating the company, citing potential securities fraud, mismanagement, and market manipulation. Celsius also has the support of a creditors’ committee in the case, which has already begun investigating many aspects of the DOJ’s original request.