The regulatory agency said an independent examiner is necessary to investigate operations, investments, loan operations, and client accounts on Celsius. They also argued this person would handle various questions related to the transaction better, protecting clients, shareholders, and the company.
Concerning the bankruptcy case of Celsius Network, the US Trustee Office has called for an independent examination. A court filing indicates many questions related to the transparency in the finances and operations of the crypto lending platform arose.
The legal document, filed on August 18th, says an independent examination would help shed light on the issues. The presiding judge will have to approve that investigation before making any decisions.
The court filing states the declaration of insolvency did not start the lack of visibility into the operations of Celsius. It adds that sudden changes in client accounts and widespread confusion about the status of assets contributed to it.
According to the document, there is no understanding between customers, stakeholders, and the public. It states they do not know the type or value of cryptocurrencies held by debtors or their location.
The US Trustee Office said an independent examiner is necessary to investigate and report clearly and understandably on the business model. The agency explained that they must detail their operations, investments, loan operations, and client accounts.
They Consider an Independent Examiner Might Handle Questions about Transactions Better
They also stated that Celsius Network had used a third-party loan from an unnamed source. They argued that an independent examiner would handle the various questions related to the transaction better. That might be in the interest of the clients, the shareholders, and the company itself.
According to a report, Alex Mashinsky, the CEO of Celsius, began overseeing operations directly before a meeting with the Fed. Some who knew the situation said he ran the individual trades and canceled the executive ones.
The independent investigation would be part of a prominent episode in the history of the crypto market. Over the last few days, the judge has allowed the company to mine and sell Bitcoin as the bankruptcy case progresses.
Celsius Might Sell or Restructure Its Business
The cryptocurrency lending platform has also thought of new financing offers through restructuring or selling its business. Supposedly, Celsius has received many cash offers, while Ripple Labs has considered acquiring the company.
The clients of Celsius are waiting for progress in the case, hoping for the possibility of recovering their funds. Some fear it will be years before the crypto lending platform gives them back their funds.
Cryptocurrencies play an increasingly relevant role in the economy, evident in the intervention of governments to regulate them. The case of Celsius Network is only an example of many platforms under the scrutiny of the authorities.
Meanwhile, Bitcoin is trading at around USD 21,394 and has accumulated a 9% loss over the last 24 hours. While its daily trading volume is above USD 28.71 billion, its market capitalization is about USD 409.19 billion, according to CoinGecko.
By Alexander Salazar
