Crypto Lending Company Celsius Does Not Pursue Outstanding Loans’ Payments
Celsius, a bankrupt crypto lending platform, stated on Friday that the firm is not pursuing the implementation of the payment obligations related to the outstanding loans. This is being done while it is in its proceedings of Chapter 11 bankruptcy. It added that there is no requirement for the borrowers to recompense such loans. Celsius, which is based in New Jersey, mentioned that it will not assess any penalties or interest after loan maturity. This was noted in the company’s filing submitted to the United States Bankruptcy Court for the Southern District of New York.
Crypto Lending Platform Celsius Says It Does not Seek Implementing Outstanding Loans-Related Payment Obligations
The bankruptcy request was filed on the behalf of Celsius in July this year with approximate liabilities and assets with a valuation between $1B and $10B, with up to 100,000 creditors. In addition to this, the lending firm listed a deficit of nearly $1.19B on the balance sheet thereof. Till the 13th of this July, it also had a huge number of outstanding loans (counting up to 23,000) to retail borrowers with a cumulative valuation of up to $765.5M in digital assets.
Recently, the crypto regulatory organizations filed to persuade the judge (presiding over the bankruptcy proceedings of Celsius) not to accept its request to restart withdrawals. The crypto lending institution has previously filed a motion, seeking permission to have its stablecoin reserves of nearly $23 million sold. The regulators cautioned the judge that the decision to allow for such actions would be premature and impulsive.
As noted in an objection, which was filed on Friday, the U.S. Trustee Program’s attorneys requested that the judge should deny the motions of the crypto lender till the filing of a report by the independent examiner. On Thursday, the bankruptcy judge appointed Chicago-based Shoba Pillay – the collaborator of Jenner & Block (a law firm).
Regulators File to Restrict Celsius’ Motion for Stablecoin Sale Till Independent Examiner’s Report
The investigation of Pillay will be focused on the operation and holdings of Celsius as well as how the company modified the account offerings thereof for a few consumers in this year’s April. This will take into account its Custody Service and Earn Program. Even before this, the stablecoin motion of Celsius has already been opposed by the state regulators based in Vermont as well as Texas. They claimed that the lending firm did not sufficiently define its purposes in this respect.
