Celsius Users Go Through a Huge Problem in Getting Their Deposits Back
Crypto lending firm Celsius Network’s bankruptcy case is getting into another chapter where the shareholders will have an advantage against the stressed consumers of the company. The clients will witness a huge disadvantage because the assets of the firm are being sold through an auction by it. Recently, a motion was filed by Celsius which, by allocating a favoured equity committee, pursues placing shareholders at the tops of the list in the case of the sale of GK8 (the custody company owned by Celsius) and the mining activities of Celsius.
Crypto Consumers Are Pushed Behind the Shareholders in Repayment
An interesting thing will potentially be the modifications made to the corporate structure of Celsius. This was witnessed amid the funding round of the previous year and an amount of up to $750 million was raised consequently just months in advance of the collapse of the firm. That transfer pushed the consumers to the back foot while the equity holders were placed at the front in the case of receiving repayments if the platform would face bankruptcy. A partner at Proskauer Rose (a law company), Vincent Indelicato, stated this.
Independent Examiner to Figure out Why and How Celsius Did This
He added that such would be the point that the autonomous examiner (pursuing to find out the cause of Celsius’ collapse) will focus on. As per him, the equity holders possess a straight claim confronting any value monetization or sale of the assets (that are mined) to the entirety of the consumer claims’ exclusion. He also mentioned that – in his perception – the examiner as well as the committee and other such parties will considerably scrutinize the respective transaction.
This would be done to check the causes behind and the manner of the shifting of the client accounts by it along with other things. One of the unanswered questions up till now is the destiny of the clients as well as the deposits thereof at Celsius. In the case of bankruptcies, it is not unfamiliar to witness the amateurs having a place behind the pros (who are backed by bankers and lawyers) for repayment. Another disaster in Celsius’ case – since its bankruptcy filing in July – is the resignation of Alex Mashinsky from the position of the chief executive officer of the firm.
