Crypto Service Provider Prime Trust to Return $17M to Celsius Network

UTC by Bhushan Akolkar · 2 min read
Crypto Service Provider Prime Trust to Return $17M to Celsius Network
Photo: Prime Trust / LinkedIn

Earlier, Celsius Network said that Prime Trust refused to fulfill its obligation of transferring the $17 million in crypto assets at the time of dissolving the agreement. 

On Thursday, October 20, crypto service provide Prime Trust agreed to return $17 million to troubled crypto lender Celsius Network. Prime Trust is popular for offering custodial services for digital assets.

Celsius Network and Prime Trust Case

The company reportedly held $119 million of Celsius’ assets. In August, Celsius Network filed a lawsuit against Prime Trust stating that the two companies terminated their contracts in June 2021. Celsius Network said that Prime Trust refused to fulfill its obligation of transferring the $17 million in crypto assets at the time of dissolving the agreement.

Last year in April 2021, the BTC price shot past $60,000 and lost nearly 50% of its value by July of the same year. Later in November 2021, the BTC price touched its new all-time high and is currently trading at around $19,000.

Post the collapse of the Terra ecosystem and crypto hedge fund 3AC, Celsius Network filed for Chapter 11 bankruptcy in July. On Thursday, during the hearing of the US Bankruptcy Court for the Southern District of New York, Prime Trust agreed to return the crypto assets to file the lawsuit. These assets will be in a different account until the court figures out how to distribute Celsius assets.

Celsius Network Federal Investigation

Troubles for Celsius Network continue with each passing day. The beleaguered crypto lender is now facing a federal investigation in the United States. The Celsius Official Committee of Unsecured Creditors (UCC) recently submitted a filing wherein it discloses facing enforcement actions in as many as 40 U.S. states.

This is in addition to “investigations or inquiries involving the federal government”. Currently, Celsius Networks is facing scrutiny from several regulatory agencies. The Securities and Exchange Commission, Federal Trade Commission, and the Commodities and Futures Trading Commission have initiated inquiries into the bankrupt crypto lender.

During a court filing earlier this month, Celsius also revealed that it has been subpoenaed by the US prosecutor and will need to appear before a federal grand jury in Manhattan. The details of the demands in the subpoena remain unknown for now.

On the other hand, recent investigations reveal that Celsius executives cashed out huge sums of money before freezing withdrawals in June. More details regarding the same await.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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