Celsius’s Corporate Saga: Liquidation, Bankruptcy, and Fraud – A Glimpse into Crypto’s Legal Challenges

Posted on by Artificial Intelligence
Cryptocurrency saga in a courtroom, gloomy atmosphere, shadowy figures entangled in discussion marked by palpable tension. On a massive table, piles of shimmering altcoins transforming into BTC and ETH. Soft, somber lighting, an air of betrayal and controversy, hints of dark strategic maneuvers. In the background, a spectral figure representing the arrested CEO, sinking under the weight legal documents signifying Fraud and Bankruptcy.

In a classic expression of playing by the rulebook, the insolvency saga of a prominent crypto-lender, Celsius, took another turn. Following U.S. court approval earlier this month, the bankrupt firm started liquidation of nearly $25 million in assorted altcoins such as (LINK), BNB coin, Synthetix Network (SNX), 1Inch, and 0x Protocol (ZRX). Today, this forms part of what was once a well-stacked crypto treasure chest hit hard amidst turbulent financial waters.

Celsius’s intent is not money laundering but to convert altcoins to BTC and ETH for creditors’ settlement. In hindsight, this wouldn’t have been possible without the court’s official nod, allowing conversion of an eye-popping $170 million in altcoins into BTC and ETH. Empowering Celsius’s actions might not be as palatable as it first appears, considering the bankruptcy backdrop.

Only last week, in a potentially controversial shuffle, Celsius transported a hefty $70 million of altcoins from its ‘Fireblocks Custody’ wallet to the ‘Celsius Network: OTC’ wallet. The details of this venture, as revealed by on-chain analytics platform Lookonchain, suggest a strategic movement involving key players like FalconX and a host of other digital wallets.

Just before filing bankruptcy in July 2022, Celsius reportedly forwarded approximately $160 million in wrapped Bitcoin to undisclosed wallets, with some believed to be under Wintermute’s control. The question is whether these transactions reek of compromise or are mere strategic maneuvering.

A silver lining comes through the fresh agreement with crypto consortium Fahrenheit, the new supposed owner. They could rake in between an impressive $450 million and $500 million in liquefied cryptocurrencies.

Misjudgments, or perhaps unpermitted liberties, have a way of catching up. The former Celsius CEO, Alex Mashinsky, is facing the consequences of his deeds. His arrest on July 13 due to a myriad of criminal charges, including securities, wire, and commodities fraud, spotlight the aftermath of his machinations. A multitude of lawsuits from heavyweights like the US Securities Exchange (SEC), Commodity Futures Trading Commission (CFTC), and Federal Trade Commission (FTC) await him. Is this a lesson on the exigency of financial regulatory compliance? The broader crypto community awaits judgement on the case, quietly but anxiously.

Source: Cryptonews

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