To those affected by Celsius Network’s bankruptcy crisis and those regularly following the progress of court proceedings, you already know that the firm had its second hearing at New York Court earlier this week on 16- August-2022. So what’s the progress now? What does it mean to depositors and creditors?
The company in its presentation on the second-day hearing continued to use corporate speech to reiterate its commitment to restructuring its business in a way which benefits its clients the best. The presentation from the firm on the second hearing highlighted committee formation, progress since filing, customer correspondence and go forward plan. But, the firm’s decision to retain its current senior-management team has resulted in a community-wide backlash over the lack of any decision regarding the removal of the current senior-level management team.
Reports have hit the headlines citing court filings which suggest that the company’s debt currently stands at US$ 2.85 billion as opposed to their claims of US$ 1.2 billion in their bankruptcy filings. This along with further reports hinting at Celcius CEO Mashinsky taking control of the firm’s trading activity resulting high volume of bad trading activities leading to bankruptcy and claims of a huge chunk of missing bitcoins belonging to investors has created huge discontent among victims and crypto users community in general.
The victims of this crisis hold the senior-management team highly responsible for this bankruptcy crisis and improper management of funds. The response from the firm so far in its court filing and correspondence between its clients is viewed in general as usual corporate speech which involves a complex non-transparent process. There is a lack of clear directives on how the victims who deposited their funds — be it institutional investors or retail traders and end users are going to be compensated.
The court ruling on 2nd hearing allows the firm to sell its mined bitcoins to generate cash flow for its operational costs, this has failed to pacify the clients and victims, however, it has blocked block Celsius from selling equity or debt investments in other crypto companies until it provides more information about the assets it wishes to sell. The company has provided details on its mining operations which shows over half of its 80,000 mining CPUs are currently operating with more CPUs scheduled to be added to the mining operations.
This clearly shows the high capacity and clear potential of the firm to ming huge volumes of bitcoins. However, the balance sheet of the transaction process in the handling and sales of Bitcoins remains highly non-transparent. The current structure fails to show how profitable the operation is to parties concerned, in this case, the victims of the ongoing bankruptcy process. A multitude of updates continues to make headlines with each passing day on various proceedings relating to the Celsius network as the firm gears up for meeting up with its clients scheduled on August 19, 2022, pursuant to section 341 of the bankruptcy code where the firm is under oath to answer various questions raised by its clients. Aside from this meeting, the firm has another hearing in court on September 1, 2022. You can find a general overview of how this event came to be in our old post.
