According to reports, the DOJ (Department of Justice) has rejected Celsius’s request to open withdrawals. The bankrupt firm had also asked the court for permission to dispose of its stablecoins.
US DOJ Rejects Celsius Motion For Withdrawal And Stablecoin Sell Out
On September 30th, William Harrington, a United States Trustee for the DOJ, filed a report with the Southern District of New York’s Bankruptcy Court. The report outlined the reasons Harrington rejected Celsius’s proposal to open withdrawals.
The DOJ stated that the company’s finances are not transparent. Additionally, the court said it could only consider such decisions after the independent examiner report is ready.
The independent examiner report is an evaluation of the company’s business operations. The report stated that:
“The motions are untimely. Hence, they are rejected until the Examiner Report has been submitted. Meanwhile, Celsius’ motion intends to hastily allocate cash to one set of creditors. However, the court is yet to have a comprehensive grasp of the Celsius crypto holdings.”
Meanwhile, the DOJ’s objections add to the recent objection of the Texas Department of Banking, the Vermont Department of Financial Regulation, and the Texas State Securities Board last week. The three entities rejected Celsius request to sell its stablecoins.
Further, Harrington rejected Celsius’s proposal for a stablecoin sell-off. It highlighted the concerns shared by Vermont and Texas regulators.
They argued the company might use the funds to continue its operations. This action would violate the state’s laws. Besides, they are uncertain what impact such sales would have on the company and creditors.
BnkToTheFuture CEO Talks About Possible Bidding For Celsius Assets
In addition, Celsius did not provide information on how it would segregate these stablecoins. Meanwhile, Harrington said the US Trustee chose Shoba Pillay as the independent examiner on September 29th.
Also, New York’s Bankruptcy Court approved the appointment on September 29th. Pillay has over two months to arrange and file the examiner’s report.
Hopefully, this report will provide a clear and elaborate breakdown of Celsius’ liabilities and assets. Perhaps, the court might reconsider the motion by the bankrupt firm after the report.
Meanwhile, the court wants to know the actual amount that Celsius owes. Also, it wants to know the amount the company plans to pay its creditors.
On October 1st, Simon Dixon, founder of BnkToTheFuture, a cryptocurrency investment platform, reined in on the matter. Recall that BnkToTheFuture was the major investor in Celsius.
Dixon said that Celsius would repay its users using Celsius tokens, CEL. However, he stated that regulators would not allow such a motion. He also noted that investors might end up bidding for the company’s assets, similar to the case of Voyager Digital.