Celsius creditors are seeking to prevent the company from selling its Bitcoin reserves, while calling the firm’s CEO’s previous attempts to reassure him as “empty and false”.
Celsius is currently filing for bankruptcy in New York, where the case is pending, but creditors’ lawyers said in a letter to the court that the sale of the mined Bitcoins was “not explained for any reasonable reason.”
Creditors Are Not Totally Against Selling Bitcoin
Although the creditors are not completely against the sale of Bitcoins, they need more details on where and how the funds from the Bitcoins to be sold will be used. Creditors urging Celsius about “transparency and limits” asked the court to make the proposed sale “subject to approval.”
Following Celsius’ filings with the court, it was learned that the company’s mining subsidiary filed for bankruptcy a day later, with $750 million plus more than 80,500 mining rigs. Subsidiary Celsius Mining sought approval for an IPO on the stock market in May and announced their mining plans, which they aim to mine over 10,000 Bitcoins by the end of this year. In April, the firm announced that it owns over 151,000 Bitcoins.
Last month, Celsius’s chief attorney, Pat Nash, asked creditors to stay calm and think long-term. Celsius is still issuing 14.2 Bitcoins per day and asked creditors to wait for market conditions to improve. However, the firm changed its stance after that and asked for court approval to sell Bitcoins.
Creditors Don’t Trust the CEO
Creditors’ levels of distrust in Celsius and its CEO, Alex Mashinsky, were even more evident in another statement from creditors to the court this week. They denounced comments made by Mashinsky as “empty and false promises” just five days before the company decided to freeze client assets. In the statement, they complained that Celsius, while “previously advocating for transparency”, “has remained largely silent” after the decision to freeze assets.
Creditors wrote that they “request a thorough investigation of Celsius, including possible misconduct by Celsius and its contents”, and will pursue “a decision that will maximize the value of Cuscius to the benefit of account holders and unsecured creditors.”
Meanwhile, the US Department of Justice has requested further court review of Celsius’ plans to pay $409,000 severance pay to 19 employees and sell Bitcoin during its bankruptcy.
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