Celsius and Voyager go through increased scrutiny from regulators in Texas and Alabama. The judge hearing Voyager bankruptcy case faced a crash lesson regarding work in the crypto environment. Voyager lawyers expressed that the entity faced a series of threats from customers.
Authorities based in Texas and Alabama are expanding their thoughts about the Crashdown of crypto-lending entities, Voyager Digital and Celsius Network.
According to a Bloomberg report, the inquiry of the state regulators got modified toward seeing if the crypto lending firms kept data away about their loans and how they determined how worthy credit is.
Joe Rotunda, director of enforcement at the Texas Securities Board, said that the crypto lending firms might not have divulged the risks of those activities.
Judge Gets Rapid Lessons about the Crypto Environment
Judge Michael Wiles received a digital asset crash course during the first-ever bankruptcy hearing for a digital asset entity. Lawyers working for Voyager had shown the Judge the meaning of staking and stablecoins.
The lawyers, alongside Judge Wiles, acknowledged that there are many mysteries regarding how to manage the bankruptcy filing, mainly because it is a first involving cryptocurrency.
The lawyer also said that the cryptocurrency field is new to many of them, and there would be various legal obstacles along the way.
The judge asked how Voyager relates with its account holders. He demanded an answer about its position as a custodian for customers’ funds or if customers are playing the role of bank depositors. His question links to customers’ funds of at least $350 million at the Metropolitan Commercial Bank.
Sussberg responded to the judge and asserted that the funds remained under customers’ control and would surely go to them. He added that this situation would have happened when they performed a proper fraud prevention process.
The Lawyers Highlighted that the Strategy Might Change if the Entity can get Investors to Purchase the Business
The lawyers leading the defending Voyager also acknowledged that the entity is dealing with a series of threats from users and government authorities trying to charge them for the issues.
By: Jenson Nuñez
