Tensions rise in Celsius As parties strive for lost equity 

During the Celsius [CEL] bankruptcy drama, a new group of creditors surfaced. Shareholders or investors with shares in the cryptocurrency lender have asserted a claim on the bankruptcy payments. In addition, these investors filed a petition in the current bankruptcy proceeding.

Milbank LLP submitted a motion on behalf of the stockholders in the current bankruptcy proceedings. 

In October 2021, equity company WestCap and the Caisse de dépôt et placement du Québec (CDPQ) led the Series B fundraising round for Celsius. After raising $400 million at a value of over $3 billion, the round concluded. 

It would be misleading to imply that stockholders are lined up for their portion of the payout. In contrast, stockholders want a greater priority than the first victims, account holders. The shareholders want to bypass the line and be the first to profit from the sale of particular assets.

Celsius owes about $5 billion to 500,000 creditors. The insolvent company’s executives are now attempting to convert their debt into a cryptocurrency token. Tiffany Fong, a well-known Celsius victim, distributed an audio recording of an internal meeting at Celsius. CTO Guillermo Bodnar is clearly describing a proposal to give IOU-based cryptocurrency to clients as compensation.

In addition, Nuke Goldstein, co-founder of Celsius discussed how “wrapped tokens” would function as an IOU for users with Celsius Earn accounts. 

Another group of claims appeared last month. This consisted of Celsius Withhold Account customers from U.S. states where it was prohibited for Celsius to provide custody accounts.

This organization sought compensation in the amount of $14.5 million. This sum was a drop in the bucket compared to the $12 billion Celsius talked about just before suspending withdrawals in June.

Also Read: Polkadot Has Launched Support For Tether’s USDT Stablecoin

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

- Advertisement -

Comments are closed.