Cryptocurrency lending company; Celsius is reportedly looking to sell its stablecoin stash. According to reports, Celsius has made an official request to a court for permission or authorization to sell its stablecoin holdings.
It is expected that the revenue generated from the sale will create the liquidity needed to properly finance the daily operations of the cryptocurrency lender.
The funds will however, not be used to repay any of the company’s creditors.
In a recent arc to its bankruptcy happenings, the cryptocurrency requested that the United States (US) Bankruptcy Court for the Southern District of New York, grant it permission to sell its stablecoin holdings worth 23 million United States Dollars (USD) which is around 2.77 billion Kenyan Shillings.
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In a filing made on the 15th of September 2022 Celsius revealed that the move is essentially for it to be able to pay for its operations.
While the proceeds of the sale would be the property of Celsius Network’s estate, it will however not be repaying any of its creditors with the money. This is because that is part of an entirely different legal process that is ongoing.
A section of the filing reads, “The Debtors, however, continue to own stablecoins that should be monetized to fund their operations in these Chapter 11 cases given their market stability compared to other types of cryptocurrencies.”
The Kirkland & Ellis law firm legal team for Celsius had before now, filed a notice of coin report. The notice of coin report, made it known that its stablecoin holdings (which is/are divided across eleven (11) different stablecoins) are worth an estimated 23 million United States Dollars (USD) which is around 2.77 billion Kenyan Shillings.
Southern District of New York’s Bankruptcy Court has now set the 6th of October 2022 as the date for the hearing where the motion would be discussed and where whether or not the motion would be approved or denied, would be decided.
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If it is authorized by Judge Martin Glenn who will be the presiding Judge, then Celsius will have sufficient liquidity to be able to execute its day to day operations “without court or creditor oversight.”
Celsius’ struggle first began after the tokens in the Terra ecosystem; LUNA and TerraUSD (UST) imploded. By June of 2022, Celsius which was at a point of the leading lending companies in the Cryptocurrency sector, then decided to freeze withdrawals for its customers. It implied that “extreme market conditions,” was why it decided to do so.
In July of 2022, the company then moved to initiate bankruptcy proceedings as it made known that it owed 5.5 billion United States Dollars (USD) which is around 653.84 billion Kenyan Shillings to its customers as well as its creditors.
Since the collapse of Celsius the company has continued to fight a number of controversies, including those involving its Chief Executive Officer (CEO); Alex Mashinsky.
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A number of reports claimed that the CEO had carried some cryptocurrency trades while using funds belonging to customers. This went against the advice provided by experienced traders at the company.
Officials at Vermont state also gave the impression that the hard pressed company; Celsius had since 2019 somehow been manipulating the price of its very own token; CEL at the expense of traders.
Celsius which is based in New Jersey, has since filed a motion to unfreeze some of the accounts belonging to its customers. It was looking to release a total of 50 million United States Dollars (USD) which is around 5.94 billion Kenyan Shillings in digital assets in its Custody Program and Withhold Accounts.
On Wednesday; the 14th of September 2022, Judge Martin Glenn approved a request for the United States (US) Trustees office to designate an independent examiner who will help shed more light on a number of issues regarding the situation at Celsius.
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The independent examiner will be expected to look into the digital assets owned by Celsius, the tax payment procedures, the changes made to its account offerings, and the present state of its mining business.
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