- Celcius’ creditor committee refuted claims that bids for the firm’s assets were rejected.
- A crypto blogger, Tiffany Fong, posted about the rejected bid last week.
- The attorney for the Creditors Committee described the reports as “regrettable.”
- Besides these claims, crypto lender Celsius has been experiencing more issues lately.
In a Twitter Space yesterday, the counsel representing Celsius’ official creditor committee debunked rumors that bids for the crypto lender had been rejected. The “Celsius UCC Town Hall” witnessed Celsius attorneys Gregory Pesce and Aaron Colodny from White & Case dislodge the claims.
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https://t.co/hbJ5GJchZCReports about the rejected bid surfaced via a Substack post last week by a crypto blogger identified as Tiffany Fong. Fong claimed about five organizations had expressed interest in acquiring Celsius’ cryptocurrency assets. According to her, the firms are Galaxy Digital, Binance, NovaWulf, Cumberland DRW, and Bank To The Future.— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) January 31, 2023
To establish the rejection of the bids, Fong pointed to a Celsius Counsel statement that described them as “not compelling.” In most cases, the bids were abandoned, according to the blogger.
I initially refrained from sharing the bids publicly to avoid disrupting the bidding procedures, but since Kirkland & Ellis proclaimed the bids “have not been compelling,” I'd love to hear what the community thinks. https://t.co/2TzdW23MBz— Tiffany Fong (@TiffanyFong_) January 26, 2023
Insights into the Condition of the Rumored Bids
One of the counsels during the space, Gregory Pesce, argued that the reports were false and the bids were not rejected. However, Pesce refused to confirm if the firms, as reported by Tiffany Fong, bid for the assets. The attorney described the reports as “regrettable” because they would reduce the committee’s position to a weaker state during the negotiation process.
Additionally, Pesce explained how the committee intended to make the best out of every bid to maximize its chances of acquiring enough funds from the auction process. Similarly, the attorney established that Celsius has been transparent with the auction proceedings.
Pesce disclosed that the committee and Celsius had provided adequate information for investors to understand where they stand. The stakeholders of the crypto lender pursued the US bankruptcy court to have a stake in claiming some of the assets belonging to Celsius, according to a report from Bloomberg.
Other than these claims, Celsius has experienced additional troubles lately.
Timeline of Recent Issues Involving Celsius
A recent Reuters report established that the crypto lender used investors’ money and deposits to push up its token, CEL. The manipulation reportedly aided top executives like Alex Mashinsky and Daniel Leon to make fortunes from token sales.
In the publication, Reuters cited a US bankruptcy examiner report released yesterday. The investigation revealed that Celsius carried out the act as early as 2020, spending about $558 million to buy the token.
Additionally, the report stated that Tether, Three Arrows Capital, and Alameda Research might exceed their credit limits with the bankrupt lender. According to the report, Tether reportedly had over $2 billion in exposure to Celsius.
In another development last October, US Bankruptcy Judge Martin Glenn ruled against Celsius stakeholders to constitute a committee of equity holders. The ruling compelled Celsius’s preferred equity holders to hire their counsel during the bankruptcy proceedings.
On the Flipside
- Amid the accusations, Celsius published the names of the users eligible to withdraw 94% of their assets.
- In the face of recent allegations regarding Tether, its CTO Paolo Ardoino insisted that the firm didn’t borrow any funds from Celsius.
Why You Should Care
Celsius owes its 100,000 creditors around $4.7 billion. To reorganize and exit bankruptcy, the crypto lender is considering issuing new digital-asset tokens to repay creditors. The sale of the assets might also help the firm improve its financial situation.
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