- The Celsius Network is set to invest $50 million to form a Litigation Oversight Committee.
- The committee will pursue pending causes of action against parties like Alameda and Core Scientific.
- Celsius may also pursue litigation against crypto influencers including BitBoy Crypto and Crypto Lark.
The Celsius Network is set to invest $50 million and set up a Litigation Oversight Committee as part of its Chapter 11 exit plan. The bankrupt crypto lender plans to pursue litigation against notable names in the crypto industry, including crypto mining giant Core Scientific, Tether International, Voyager Digital, and the defunct crypto hedge fund Three Arrows Capital (3AC).
Crypto influencer Simon Dixon took to Twitter earlier today to inform the Celsius community about the next step in its Chapter 11 plan. The crypto lender will pursue causes of actions that were retained by the bankruptcy estate. The defendants in these causes of action will be litigated for reasons ranging from breach of contract, gross negligence, damages, intentional misconduct, fraud, and market manipulation, among several others.
The Litigation Oversight Committee will also address the matter of subordinated claims. According to the notice filed in the U.S. Bankruptcy Court for the Southern District of New York, four of the parties in the schedule of subordinated claims were shell companies controlled by Celsius’ disgraced founder Alex Mashinsky.
Dixon revealed that the shell companies, namely AM Ventures Holdings and Koala LLCs, were full of Celsius’ native token CEL. Mashinsky was reportedly attempting to drain BTC and ETH from the bankruptcy estate using the CEL tokens held by his shell companies. Mashinsky reportedly withdrew his BTC and ETH prior to the bankruptcy filing in July last year, while simultaneously encouraging the platform’s users to deposit their crypto assets.
The filing also included a schedule of excluded parties, which will not be protected from litigation by the bankruptcy estate. The list included Sam Bankman-Fried’s Alameda Research, Alex Mashinsky, Chainalysis, USDC issuer Circle Internet Financial, and big four accounting giant Deloitte, among several others. It also included crypto influencers like BitBoy Crypto and Crypto Lark.
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