Celsius Bankruptcy Case to Get Independent Examiner

UTC by Sanaa Sharma · 2 min read
Celsius Bankruptcy Case to Get Independent Examiner
Photo: Web Summit / Flickr

Celsius prompted bankruptcy filing this summer as it froze customer withdrawal from its platform.

To investigate the case of Celsius Network and its eventual bankruptcy, a United States bankruptcy judge has ordered the appointment of an external, autonomous examiner to look into the firm’s backstory.

The federal judge, on Wednesday, gave a nod to a motion for the US Trustee’s office to assign an investigator to scrutinize the case that propelled the company to file for bankruptcy earlier this summer. According to the judge, Martin Glenn, the breadth of the investigation for the autonomous examiner would comprise a detailed inspection of various domains, like Celsius’ crypto holding, and also the reason for a shift in account offerings from the Earn Program to Custody Service for select clients when the others were positioned in a ‘Withhold Account’. Other areas of speculation would also include the company’s processes for reimbursing taxes and the present level of utility commitments of Celsius’ mining undertaking.

While the prominent consumer and creditor community, called the Committee for Unsecured Creditors, previously lifted the issue that hiring an examiner would be expensive, and eventually came to a mutual agreement that the extent of the investigation would be limited. The company, on the other hand, has chalked out a plan via which a still-developing mining project will enable it to accumulate funds to resume operations. During the last week, Celsius and a few other creditors decided that an autonomous examiner appointed by the administration would look into the company’s situation.

Even though many people agreed with the move, several others were unhappy as both the UCC and attorneys for Celsius claimed in their individual filings that the move will be brought into action only if the breadth of the investigation remained restricted to the cost limit.

In the judge’s ruling, it is stated that as soon as the examiner is appointed and brought into action, they will spend a week developing a work plan and budget for the future. The judiciary will then take another week to verify and pass the plan, subsequently, giving the investigator approximately two months to submit their report.

Celsius prompted bankruptcy filing this summer as it froze customer withdrawal from its platform. The move alerted the company’s investors and eventually led to the immediate withdrawal of the funds. In the filings, Celsius declared that the company is under a debt of $4.7 billion to its clients.

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