U.S Court Approves Independent Examiner in Celsius Case

U.S Court Approves Independent Examiner in Celsius Case
  • The investigator will also review the rationale behind the April service shift.
  • Previously, the U.S. Trustee mentioned the lack of clarity around few accounts.

A move to appoint an independent examiner to probe portions of crypto lender Celsius’ operations was granted by the federal court supervising Celsius’ bankruptcy case.

The United States Bankruptcy Court for the Southern District of New York issued an order on Wednesday stating that an examiner will be looking into Celsius’ digital assets, tax payment systems, and the present state of its mining company in response to requests for further information.

Significant Transparency Issues

The investigator will also review the rationale behind the April service shift that saw some clients transferred from the Earn Program to Custody Services and others to a “Withhold Account.”

Previously, the U.S. Trustee has mentioned the lack of clarity around these accounts, with clients being unsure of who owns certain accounts and for what purposes. Celsius had sought the court to restore assets to its “custody clients,” but not its “earn-and-borrow” clients, thus this distinction might be significant.

The United States Trustee in charge of Celsius’ bankruptcy proceedings first filed a motion to appoint an examiner on August 18. The filing cited “significant transparency issues” in regard to Celsius’ corporate operations.

Since the motion was filed, however, BnkToTheFuture CEO Simon Dixon has said that the scope of the examiner’s probe has been reduced so that Celsius does not exhaust its financial resources.

Additionally, he said that Alex Mashinsky, CEO of Celsius Network, would be required to disclose any funds he had withdrawn from the service prior to the freezing. According to the most recent ruling, Celsius and the official committee of unsecured creditors must be consulted before any further inquiry is launched.

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