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The Department of Justice (DOJ) has challenged Celsius’ motion to resume withdrawals for some customers and sell its stablecoin holdings.
DOJ argues that Celsius lacks transparency in its financial position and that such a significant decision should not be considered until the independent examiner’s report is filed.
The DOJ’s move adds to challenges filed last week by the Texas Securities Commission, the Texas Department of Banking and the Vermont Department of Financial Regulatory Affairs. All three companies oppose Celsius selling its stablecoin holdings, arguing that the company risks using capital to resume operations in violation of state law.
William Harrington said in a Sept. 30 filing with the U.S. Department of Justice trustee, the United States Bankruptcy Court for the Southern District of New York, that Celsius will open withdrawals to customers on “custody” and “hold.” objected to. Company financial transparency.
Harrington argues in the filing that such withdrawals should not begin until the independent examiner’s report on Celsius’ business operations is complete.
The motion is premature and should be dismissed until the examiners report is filed. They are trying to impulsively distribute funds to their creditors.
The DOJ also opposes a potential stablecoin sale, highlighting that regulators in Texas and Vermont have similar concerns, and that the Celsius motion could affect future business. It does not specifically outline “what impact such distribution or sale will have”.
Secondly, Stablecoin Motion seeks to liquidate the stablecoins held by the debtor, and subsequently to creditors who may have ownership, separation, or deposits of the stablecoins with the debtor. We will not provide information regarding the impact of any such sale on the distribution of the Company,” the filing reads.
According to Harrington, “the United States Trustee appointed Shoba Pillay as Examiner on September 29,” and the New York Bankruptcy Court confirmed the appointment on the same day.
Pillay will take about two months to prepare and submit a research report on Celsius, hopefully providing a clear breakdown of its assets and liabilities.
Harrington essentially argues that Celsius’ motion should not be considered until the examiner’s report has been filed, stating that “until the interested parties, the United States Trustee, and the court can decide, Distribution or sale should be postponed.” of the value of Celsius’s debt, the claims against it, its assets, and what “the debtor actually intends to pay to the creditor.”
Related: Crypto Biz: Voyager Digital Auction Closed Now?
Simon Dixon, founder of crypto investment platform BnkToTheFuture and former principal investor of Celsius, tweeted on Oct. 1 that Celsius will repay creditors in Celsius (CEL) tokens as part of its turnaround plan. “We anticipate that it will consider the matter and should not be passed by the regulator that ultimately ‘won’, and the regulator will file a motion to reject it.”
Dixon sees such a thing as sparking a bidding war for Celsius assets, similar to Voyager Digital’s recent $1.3 billion asset auction won by FTX US.
3/9) This drives vultures into the bidding process, vultures try and buy assets we paid for without our consent, and FTX and TradFi give us pennies in dollars. For @investvoyager depending on hole size. pic.twitter.com/4EqspGx9iF
Simon Dixon (Beware of Impersonation) (@SimonDixonTwitt) October 1, 2022
