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News Report

Celsius Bankruptcy Case Requires Independent Examiner Says US Trustee Office

2 mins
Updated by Kyle Baird

In Brief

  • The U.S. Trustee filed a motion asking for an independent examiner in the Celsius bankruptcy case.
  • The filing said that there were questions surrounding the operation and finances of Celsius.
  • It also noted that Celsius took a third-party loan from an unidentified source.
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The United States Trustee Office has asked for an independent probe of Celsius in the bankruptcy case. A court filing states that there were multiple questions related to the transparency of Celsius’ finances and operations.

The United States Trustee Office has filed a motion asking for an independent examiner in the bankruptcy case of Celsius Network. The court filing made on Aug. 18 states that an independent review would help shed light on transparency issues related to Celsius’ finances and operations. The judge presiding over the case will have to approve this independent probe.

The filing states that the lack of visibility regarding Celsius’ operations “didn’t start with the
bankruptcy filing” and that it has “been ongoing and is evidenced by the sudden changes in types of
customer accounts and extensive customer confusion about the status of individual assets.”

It reads,

“There is no real understanding among customers, parties in interest, and the public as to the type or actual value of crypto held by the Debtors or where it is held. An independent examiner is necessary here to investigate and report in a clear and understandable way on the Debtors’ business model, their operations, their investments, their lending transactions, and the nature of the customer accounts….”

It also said that Celsius made use of a third-party loan from an unidentified source. The series of questions regarding the operation would be best handled by an independent examiner, and this would be in the interest of Celsius’ customers, shareholders, and the company itself.

One report said that Celsius CEO Alex Mashinsky began overseeing trades directly days before a meeting with the United States Federal Reserve. People familiar with the situation said that he directed individual trades and overruled executives.

The probe would be the next major development in what is already a major episode in the crypto market’s history. Several other developments have also taken place in recent days, with the judge allowing the company to mine and sell bitcoin as the bankruptcy case progresses.

Celsius has also been considering fresh financing offers through restructuring or selling its business. The company has reportedly received multiple cash offers. One report claimed that Ripple Labs was considering acquiring Celsius.

Meanwhile, Celsius customers are awaiting some progress on the case and hoping for some news on the possibility of regaining their funds. Some worry that it could be years before they see their funds returned.


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