Mining branch of Celsius may not sell bitcoin after all

Last Updated: 12 August 2022

The creditors of Celsius Network have put pressure on the company. They accuse the company of “possible misconduct by Celsius and its insiders.”

Keeping Bitcoin

During the hearing of the Chapter 11 bankruptcy proceedings, the committee issued a ban on Celsius selling any part of its bitcoin.

These are the sats of Celsius Mining, the cryptolender’s subsidiary. On 13 July, the company filed for bankruptcy, only to do the same with its mining branch one day later.

This week, lawyers for the committee wrote that they first need to know more about how the sale of Celsius Mining’s bitcoin will take place. They also want to know how the proceeds will be used in the proceedings.

Celsius has previously stated that it will use its mining activities to repay creditors and customers.

At the beginning of July, it received court approval to use $5 million to get its mining operations back on track. However, this idea was criticised by the US Department of Justice, among others. Now the creditors’ committee is also expressing its doubts.

Paperwork and research

A “broad investigation” will be launched. It is expected that Rule 2004 will be invoked. It is a way to better investigate the debtor’s finances.

Alex Mashinsky, CEO of Celsius Network, has meanwhile submitted a statement of more than 1,000 pages. It contains all versions of the company’s terms of use for all its products.

There is still a lot of uncertainty for users: nobody knows yet if and how much they will get back from their deposits.

On top of this, the CEO is now being accused of making “empty and false promises.” A week before the pause button was pressed, Celsius published another positive blog post with the title, “Damn the Torpedoes, Full Speed Ahead.”

Author

  • Ivan came across the topic of cryptocurrencies in early 2016 and, as an author and enthusiast, has been intensively involved with the topics of cryptocurrencies, blockchain and STOs ever since.

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