Source: Adobe/Casimiro
Celsius Creditors want to stop the bankrupt crypto lender from selling mined Bitcoin (BTC) reserves — and have called the firm’s CEO previous attempts to reassure them “empty and wrong.”
The company files for bankruptcy in New York, where the case is now being tried. But in a letter to the court, the creditors’ lawyers wrote that the plan to sell mined tokens was “not [been] described in every depth.”
While creditors didn’t claim that they totally opposed the idea of a sale, they did claim that they needed more information about the nature of the sale — and how the proceeds from the sale would be used.
They called for “limits and transparency” from Celsius and asked the court to make “conditions” on its approval of the proposed sale.
Celsius’ own filings in court stated that the company’s mining subsidiary (which filed for bankruptcy the day after its parent company) owns more than 80,500 mining assets valued at about $750 million.
the subsidiary, Celsius mining, had applied for approval for a public listing on the exchange in May and announced plans to mine over 10,000 BTC by the end of this year. In April, the company said it owned over 151,000 BTC ($3.6 billion at current prices).
Last month Pat Nash, Celsius’s lead attorney, urged creditors to step back and take a long-term view. He urged them to wait for market prices to recover as Celsius Mining was already minting 14.2 BTC per day and was hoping to expand its operations.
Since then, the firm has changed its mind and asked the court to have its BTC converted to fiat to help it pay off its obligations.
Distrust of Celsius and its CEO, Alex Mashinsky, became even clearer in a separate statement from creditors in court this week. They condemned Mashinsky’s comments as “empty and false promises” just five days before the company’s decision to freeze its client assets (now deleted).
In the statement, creditors complained that while Celsius had “previously stood up for its transparency,” it had “largely remained silent” following its decision to freeze assets.
Creditors wrote that they are “committed to a thorough investigation into Celsius, including possible wrongdoing by Celsius and its insiders,” and will seek a “resolution that will maximize Celsius’ value for the benefit of its account holders and unsecured creditors.”
Meanwhile the US Department of Justice has also called for more court oversight over Celsius’ plans to pay $409,000 in severance payments to 19 employees and sell BTC during its bankruptcy, Reuters reported.
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Learn more:
– How to recognize the next degree Celsius before it’s too late
– Anger, Worry and Doubt – Celsius customers are “praying” for the return of their crypto
– How Celsius went bankrupt in months by billions
– Former employees say Celsius was mismanaged
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