- Celsius has filed a request to sell its Stablecoin reserves.
- The proceeds from the sale would fund the firm’s operating expenses.
- The amount of sale is yet to be decided in court.
The financially struggling crypto lender Celsius has filed for Chapter 11 bankruptcy and is currently attempting to sell its stablecoin reserves. Celsius’s management said in a request to the United States Bankruptcy Court Southern District Of New York that the firm has stablecoins valued at about $23 million across its US, UK, and EU branches.
At our hearing today and throughout our case, Celsius continues to engage with the Unsecured Creditors Committee and U.S. Trustee to make meaningful progress on our efforts to maximize value for all customers and ensure transparency in our case.
— Celsius (@CelsiusNetwork) September 15, 2022
The recent request, however, is not meant to free up cash flow for the purpose of repaying creditors. The sale’s potential proceeds would instead go toward covering Celsius’ operating expenses, raising questions about whether or not the court will view this as proper use of the debtors’ limited resources.
On the other hand, the latest coin report reveals that Celsius Network (CEL) is liable for more than $2 billion worth of cryptocurrency. There is currently $3.6 billion in crypto assets under management compared to a net liability of $6.1 billion. Since the previous coin report was published a month ago, not much has changed.
Judge Martin Glenn, who is presiding over the case, has previously granted Celsius’s August motion to mine and sell Bitcoin, despite the lender’s warning that the activity would not yield profits directly due to necessary expenditures for mining hardware. As of now, the company has only released $50 million to debtors with Custody and Withhold accounts.
Furthermore, the document states that the preliminary inquiry of Celsius’s request does not violate any current legislation. Since the proposed assets for sale are stablecoins, they are not subject to regulations that prevent or limit the ability of debtors to sell assets at risk of devaluation or appreciation.
However, the document makes it abundantly clear that the preliminary judgment is not indicative of the court’s approval and that the topic will be reviewed at the scheduled October 6 hearing.
Even though the complete amount of sales is still up for question at the hearing, the court has authorized Celsius to keep selling stablecoins that are not Custody and Withhold customer assets.
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