Crypto Opinions & News Crypto Lender Celsius Files for Bankruptcy

[upnorth]

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https://arstechnica.com/tech-policy/2022/07/crypto-lender-celsius-files-for-bankruptcy-still-wont-let-users-withdraw-funds/

Cryptocurrency loan company Celsius filed for bankruptcy under Chapter 11 yesterday, one month after the lender announced it was suspending withdrawals.

The petitions for reorganization give Celsius "the best opportunity to stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and emerge from Chapter 11 positioned for success in the cryptocurrency industry," the company said. In an FAQ updated yesterday, Celsius told users that withdrawals are still suspended. As part of the bankruptcy process, Celsius said it "intend to put forward a plan that restores activity across the platform." But it offered no timeline for allowing withdrawals and other suspended transactions again.

Celsius was slamming its critics and claiming optimism about its future shortly before it suspended withdrawals. Celsius cofounder and CEO Alex Mashinsky blasted what he called "FUD and misinformation" in a tweet on June 11, asking a critic, "do you know even one person who has a problem withdrawing from Celsius?"

As the Financial Times notes, Celsius is the latest in "a wave of digital asset companies that have frozen assets and entered restructuring amid a sharp sell-off in cryptocurrencies this year." Crypto hedge fund Three Arrows Capital filed for bankruptcy on July 1, while crypto lender Voyager Digital filed for bankruptcy on July 6.

Crypto lender Celsius files for bankruptcy, still won’t let users withdraw funds

Firm scoffed at "misinformation"—then halted withdrawals and filed for bankruptcy.

arstechnica.com

 

[upnorth]

Documents filed in crypto lender Celsius Networks' bankruptcy case have revealed financial info on more than 600,000 users.

The massive document set [PDF, see page 34] contains the names of hundreds of thousands of Celsius customers, along with the types and amounts of transactions they performed with Celsius – such as deposits, withdrawals, and interest earned – and a few other bits of metadata. Which is a little awkward for the privacy-obsessed world of cryptocurrency. This isn't a leak, though. The paperwork containing the info was a statement of financial affairs Celsius filed in court last week; specifically, details of "payments or transfers to creditors" in the three months to the start of bankruptcy proceedings. This isn't out of the ordinary for Chapter 11 bankruptcy cases in the United States, which as The Block explained over the weekend, work on the principle of full disclosure.

The argument goes that transparency is key when it comes to handling claims by potential creditors: the organization's financial affairs need to be opened up, hence the filing.

Along with those customer records, the documents submitted in the case include extensive info on the dealings of Celsius executives, including ex-CEO Alex Mashinsky who cashed out $10 million in crypto-assets from the biz in May before Celsius froze withdrawals for ordinary users in June.

600k+ Celsius customer crypto info revealed in court filing

And why it's not actually a leak

www.theregister.com

 

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Hooray!

 

[upnorth]

A court-appointed examiner investigating the collapse of cryptocurrency biz Celsius has issued a report of her findings, which are wrapped up in the very first sentence of its executive summary.

"The business model Celsius advertised and sold to its customers was not the business that Celsius actually operated," attorney and independent examiner Shobal Pillay said of her findings. Later she notes in the 476-page damning report [PDF] "Behind the scenes, Celsius conducted its business in a starkly different manner than how it marketed itself to its customers in every key respect. Celsius abandoned its promise of transparency from its start." From its inception as a public company, Celsius lied by concealing from investors it failed to meet its $50 million earnings target from its initial coin offering, or ICO, of its company CEL tokens, she alleges.

"Despite its promises of transparency, Celsius debated internally whether to tell its community how the ICO actually turned out but decided not to do so because it feared its community would be upset," Pillay said in the report, which noted that former CEO Alex Mashinsky promised to buy the unsold tokens from the ICO, but never did so.

Celsius was cheating investors 'from the start' claims audit

If it walks like a Ponzi, quacks like a Ponzi, guess what it is?

www.theregister.com