The United States Bankruptcy Court of the Southern District of New York has approved the appointment of an independent examiner to probe the business of embattled crypto lender, Celsius. The Court issued the directive in its Wednesday order note. As reported, the independent examiner will be mandated to probe Celsius’ digital assets, tax payment procedures, and the current condition of its mining business.
Additionally, the court mandates the examiner to probe the circumstances behind a change in account offerings in April. The development, as reported, led to the migration of some Celsius customers from the Earn Program to Custody Services. Similarly, several others became moved to a “Withhold Account.”
As reported, Celsius must avail every documents the examiner “reasonably deems relevant to perform the investigation.” However, Celsius have the right to reject any of such requests, in which the court will now decide on it. Also, the Court hinted on the possibility of expanding the scope of the investigation if necessary. However, it says such decision would mandates its consultation with Celsius and the official committee of unsecured creditors.
Notably, the Court plans to avail seven days ultimatum to Celsius independent examiner to produce a work plan and budget after their inauguration. Upon the approval of the budget and work plan, they will be mandated to complete their investigation within 60 days.
Worth noting that the motion, requesting for the appointment of an independent examiner manifested mid-August. The filing, as reported, manifested from the United States Trustee handling Celsius’ bankruptcy proceedings. The Trustee cited “significant transparency issues, ” enveloped in the business activities of Celsius.
Chapter 11 filing by Celsius
Recall that the crypto lender, in the wake of its liquidity crisis filed for Chapter 11 bankruptcy in July. Before then, Celsius halted withdrawals, deposits, and trading on its network. According to the protocol, it intends to undergo robust restructuring. It reportedly reshuffled its management board.
In its filing before the United States Bankruptcy Court, Celsius confirmed that it owes about $4.7 billion. More so, the crypto lender hinted that it posseses liabilities of $5.5 billion and assets of $4.2 billion.
According to Celsius, it posseses a $167 million in cash on hand, to avail “ample liquidity in supporting its operations during the restructuring process. ” As reported, the lender seeks a smooth transition into Chapter 11. Then, it filed numerous motions to seek the approval of the Court for the continuation of operations in the normal course.