By
Chimamanda U. Martha
February 8th, 2024
Meanwhile, the filing noted that the sales do not breach any law since the assets in question are stablecoins.
Celsius Network has filed a motion at the US Bankruptcy Court for the Southern District of New York. According to the filing, Celsius is seeking permission to sell off its stablecoin holdings to fund its operations.
Celsius froze user accounts on June 13 in the wake of the cryptocurrency market meltdown that led to panic withdrawals. One month later, the crypto lender filed for a Chapter 11 bankruptcy. At the time, the company had a liability of $4.7 billion. It also had $167 million as cash on hand and $4.3 billion in illiquid assets.
As a result of the type of bankruptcy filing, Celsius can continue operations while restructuring its finances to pay back creditors. The new filing states that the Celsius network has stablecoin holdings worth approximately $23 million spread across its US, UK, and EU entities.
Earlier in August, the presiding judge, Martin Glenn, approved a motion to allow Celsius to mine and sell Bitcoin to raise funds for its creditors. Celsius obtained the approval even though it noted that generating profit was long-term. The firm cited that the initial investment would be invested in mining infrastructure.
Celsius made a separate filing to keep its former chief financial officer, Rod Bolger, on retainer with about $92,000 per month ($120,000 Canadian) while the bankruptcy is resolved. However, the firm’s lawyers withdrew the request after facing backlash from several Celsius customers.
Celsius Network Filing Does Not Breach the Law
Meanwhile, the filing noted that the sales do not breach any law since the assets in question are stablecoins. Also, the document stated that stablecoins are not at risk of depreciation or appreciation and so do not prohibit or restrict the rights of debtors.
Judge Glen announced he would listen to the arguments at the next hearing. The hearing will take place on October 6. Until then, the court has granted Celsius permission to sell stablecoins that are not customer assets.
Meanwhile, the US Trustee’s office filed a motion to appoint an independent examiner to investigate the company in August. The judge approved the examiner, mandating that a work plan and budget b ready for approval in seven business days. Then, the court will approve the examiner’s plan and wait on the investigator’s report for 60 days.