Celsius Network was perhaps one of the worst-hit firms when the crypto winter struck in 2022.
Bankrupt crypto lender Celsius Network has accused Indianapolis-based EquitiesFirst Holdings of owing it some undisclosed amounts. That is according to a September 6 adversary complaint that was filed by Celsius. Although sealed, the title of the docket under which the complaint was filed reveals that Celsius may be seeking an injunction in line with its bid to recover some of its assets. Additionally, the filing also names both EquitiesFirst and its CEO Alexander Christy as defendants in the case.
Meanwhile, Celsius also filed a summons on the same day. Per the filing, EquitiesFirst will have no more than 35 days to file a response.
The business between Celsius and EquitiesFirst dates as far back as 2019. That was the time that Celsius started taking collateralized loans from private lender to “support its operations.” Per Celsius, it took the loan because institutional lending was rare at the time.
However, when it later attempted to retrieve the collateral in July 2021, the lender failed to return the amount it had pledged.
As of July 2021, EquitiesFirst was reportedly owing Celsius to the tune of $509 million. But the lender has been gradually repaying the debt at a $5 million monthly rate since September 2021. So, by July 2022, EquitiesFirst owed a total of $439 million ($361 million in cash and 3,765 Bitcoin).
Celsius Network to Relaunch?
As it stands, it appears that Celsius may relaunch as a new company. Its creditors are currently voting on a settlement plan that would see a consortium called Fahrenheit buy Celsius’ assets and return creditors’ funds.
Celsius Network was perhaps one of the worst-hit firms when the crypto winter struck in 2022. So much so that it eventually filed for bankruptcy protection in July 2022.
Since then, it has been one issue or another with the bankrupt crypto lender. The Federal Trade Commission has slammed Celsius with a $4.7 billion fine for allegedly “duping” users. Also, the former CEO Alex Mashinsky was arrested on July 13 this year, for his alleged role in misleading Celsius users and defrauding them of their money.