US Regulatory Agency Files Motion Demanding Probe of Bankrupt Crypto Lender Celsius Network

A government-appointed trustee is seeking help as they grapple with the complexities of bankruptcy proceedings for the difficult crypto lending platform Celsius Network (CEL).

with new motion submitted In the U.S. District Bankruptcy Court in New York, trustee William Harrington requested the appointment of an examiner to understand lenders’ “intentionally opaque” cryptocurrency-based operations.

Investigate and report on the nature of the debtors business model, operations, investments, lending transactions, and customer accounts in a clear and understandable manner, and conduct independent review to ensure public confidence in the integrity of the debtor. An official is needed here, a bankruptcy system and creditors and stakeholders aimed at neutralizing the inherent distrust of debtors.

The US Trustee Program is overseen by the Department of Justice (DOJ). Trustees are appointed by the government to serve on behalf of debtors during bankruptcy proceedings.

In the case of a Chapter 11 bankruptcy, the trustee helps the debtor manage its business obligations and outstanding debts and manage its assets.

Harrington went on to say that despite Celsius’ cooperation in providing information about the bankruptcy, significant transparency issues remain.

Due to the divergence of various real estate interests, the extreme financial misconduct that occurred, and the widespread mistrust of the debtor’s customers, the independent interests of the An unrelated examiner has been appointed. Bankruptcy Estates.”

The documents filed underline the importance of an independent examiner not only because “the amount at issue is enormous” but also because there are “credible allegations of incompetence or gross mismanagement.”

Celsius Network originally filed for bankruptcy in mid-July. Just a few weeks after that, his native token CEL temporarily dropped from around $0.90 to $0.09 after halting all customer trading and withdrawals citing extreme market volatility.

The Centralized Finance (CeFi) company has since been slapped in a class action lawsuit alleging it operates as a Ponzi scheme. We have issued a cease and desist order for alleged violations.

At the time of writing, the Celsius Network is down 12.78%, trading at $2.63.

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