According to information from a court-appointed examiner for its bankruptcy court proceedings, Celsius Network, the collapsed virtual digital asset lending firm, had deceived its customers since its establishment as a public industry in the United States, which it unlawfully established to prevent regulation in the U.K.
Surprisingly, Celsius United States, on a stand-alone basis, has been bankrupt since its establishment, according to the solvency analysis by the United States examiner, who shared through a tweet by the writer and speaker on economics, monetary policy, and finance at the beginning of this month.
Further into the information, the report found evidence that the virtual digital asset lending company was established in August, a couple of years ago. After further scrutinization by the United Kingdom watchdog Financial Conduct Authority denied the cryptocurrency lending firm a license and demanded it stops distributing to retail consumers in the nation.
The Unpredictable Connections
The court-appointed examiner also attracted attention to the intercompany accounting between the two parties, which Coppola announced was convoluted, to state the least, and comprises bizarre loans and equitable transfers similar to those in the Celsius procedures that she elaborated earlier.
As the economist stated, the Celsius United States was formulated to circumvent the United Kingdom regulation, as an internal audit never indicated between the two parties, rather viewing them on a consolidated basis; in addition, the economist does not think that they ever had the slimmest possible intention of establishing a stand-alone United States party.
Following events from the court-appointed examiner, the report shows that Coppola disclosed significant parts of Celsius’s business, including its mining business, Treasury, and GK8 remaining with the United Kingdom.
Proof of Reserve
In addition, Celsius’s United Kingdom branch indicated that no accounts had been filed since the end of 2020 on the portal of Companies House, the executive agency fostered by the Department for Business, Industrial and Energy Plans, which catalogs data about industries in the United Kingdom and makes it accessible to the public.
Following these events, the Companies House webpage for Celsius Network United Kingdom showed that its wallets were significantly overdue, taking note that it was supposed to file its 2021 annual accounts by the end of last year.
Furthermore, Celsius was involved in scam allegations from the virtual digital asset community after it launched a strategy to abandon the bankruptcy by branding itself into a public exchange recovery corporation, which also enables creditors with fixed assets above a certain threshold a token known as Asset Share Token reflecting the price of their virtual digital assets.
Interestingly, in September last year, Finbold announced on regulators accusing Celsius’s industry directors of mismanaging investors and traders before the high-profile fall from grace and creating questionable transactions like the one that the wife of Ex-Celsius Chief Executive Officer Alex Manshinsky, who had allegedly withdrawn two million dollars in digital asset before filing for bankruptcy.
Launch of Fully-Backed and Regulated Stablecoin
On the other hand, a fintech company has rolled out Europe’s first fully backed payment protocol and regulated Stablecoin. The Stablecoin has been launched on the ETH Blockchain. The digital asset will allow practically zero-cost exchanges to be executed anywhere in the world.
The challenge that Stablecoin is resolving has progressed for decades in which the traditional financial system needs days to settle down payments, whose charges are high, and need friction from several third parties.