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Regulators in two states oppose seeking permission to sell stablecoins held by bankrupt crypto lender Celsius.
According to recent court documents, the Vermont Department of Treasury, along with two Texas regulators, are challenging Celsius and asking bankruptcy court to see if the remaining stablecoins can be sold.
Texas Institution Say Celsius should not be given permission because it has not disclosed how many stablecoins will be sold and how the sale will benefit creditors.
In addition, the state of Texas said that an investigator has been hired by the government to investigate Celsius’ cryptocurrency holdings, and that it would be “improper” to sell the assets while the investigation is pending.
Debtors will not be able to state how much of the stablecoin will be sold and how monetization of the stablecoin will ultimately benefit the bankruptcy estate and the debtors many consumer creditors. Not disclosed…
Finally, the U.S. Trustee is currently in the process of hiring examiners specifically to screen debtors’ cryptocurrency holdings. Any request to sell some of these virtual assets while this review is pending is inappropriate.
vermont is filing Celsius objected on the grounds that it would have to operate illegally within its borders to sell the stablecoin.
What the obligor intends to do with the proceeds of such a sale, whether the relief sought extends to stablecoin-denominated assets such as retail loans to consumers, and to what extent the obligor will share the proceeds of the sale. It is not at all clear whether it will be overseen by the courts.
To the extent that the debtor’s proposed activity involves the offering or sale of securities or the exchange of money in Vermont, the debtor may legally operate without proper securities registration and/or license as a money transmitter. You cannot proceed.
Celsius, which owns 11 stablecoins worth about $23 million, sought permission from a bankruptcy court earlier this month to liquidate its holdings. The company said it could raise operating capital by selling its tokens.
The Obligor should exercise reasonable business judgment to ensure that the sale of stablecoins consistent with past practice and normal course of business provides liquidity to help fund the Obligors operations. I believe it’s an efficient way to create.”
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