The quest for justice regarding the defunct crypto lender Celsius Network’s debacle takes center stage as newly filed documents reveal the company’s alleged attempt to merge its UK and US operations. It is worth noting that these operations were believed to be fraudulent, as they enabled the transfer of billions of dollars in assets between the two countries. It is now argued that both entities should be treated as the same in the ongoing bankruptcy proceedings.
The origin of this argument can be traced back to Celsius Network’s plan to halt its business activities in the UK following a warning from the Financial Conduct Authority. The motive behind this move was to shift assets to a newly created Delaware-based Limited Liability Company (LLC) as a protective measure against legal actions. This move has sparked concerns, as ordinary investors might not have fully comprehended the implications of the transfer due to its opaque nature.
Bitcoin investor Simon Dixon, who lost over $8.8 million in the Celsius collapse, further supports this sentiment through a tweet that sheds light on the lack of clarity and poor documentation provided by the company. As a result, the separation of the two entities appears to have been nothing more than a “sham.”
In a contrasting development, Chief US Bankruptcy Judge Martin Glenn ruled that consumers can only file claims against the Delaware-based LLC. This decision increases the chances of repayment for Series B investors, potentially at the expense of smaller creditors.
As the tug-of-war for assets and funds continues, an upcoming auction will see large companies, including Coinbase and Gemini, vying for the remaining Celsius assets. NovaWulf Digital Management, as the “stalking horse bidder,” has set the baseline price for subsequent bids between $45 million and $55 million. If their bid is successful, customers may potentially recover up to 70% of their funds.
This complex case lays bare the need for greater transparency and regulatory oversight in the crypto market. While some might argue that the integration of the UK and US operations would protect smaller investors, others might wonder whether these proceedings highlight the inherent risks that come with investing in the rapidly evolving, yet largely unregulated, blockchain and crypto industry.
Source: crypto.news
