Celsius: Judge permits independent examiner’s probe in bankruptcy case
A federal judge from the United States Bankruptcy Court for the Southern District of New York hasallowed the U.S. Trustee’s office to appoint an independent examiner to investigate the affairs at the New Jersey-based bankrupt cryptocurrency lending company Celsius Network.
It was on 13 July 2022 that the Celsius Networksaid that it had filed for Chapter 11 Protection in order to restructure and stabilize its business.
The United States Trustee is a Department of Justice component responsible for overseeing the administration of bankruptcy cases.
Judge Martin Glenn ruled that the examiner would look into a number of areas, including (i) the nature of Celsius’ crypto holdings, (ii) why April 2022 onwards, account offerings changed from the Earn Program to the Custody Service for some customers while for others, it was a Withhold Account, (iii) Celsius’ procedures for paying various taxes and the extent of its compliance with non-bankruptcy laws, and (iv) the current status of the utility obligations of its mining business.
Founded in 2017, Celsius soon emerged as a major crypto company with operations in four countries, including the US, the UK, Serbia, and Israel.
In September 2021, Texas, New Jersey, Kentucky, and Alabamainitiated an investigation against Celsius for allegedly offering unregistered securities to its users in these states.
The exchange said that none of its offerings were securities and it remained committed to complying with state regulations in its operations.
In May 2022, Celsius was reported to have witnessed a 50% decline in the value of its assets, asreported by Financial Times.
The same month, a pair of leading digital tokens, viz. Luna and TerraUSD, collapsed. The Wall Street Journal reported that the
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