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- The official committee of unsecured creditors raised objection to the debtors’ (Celsius Network) motion.
- The following motion includes the entry of an order for permitting the sale of stablecoin in the ordinary course and granting related relief.
The Official Committee of Unsecured Celsius Creditors (the “Committee”) filed a motion on October 25, 2022. According to the document “The Official Committee of Unsecured Creditors appointed in the cases of the Celsius Network (Debtors) states as follows in support of this objection (the “Objection”) to the Debtors’ Motion Seeking Entry of an Order (I) Permitting the Sale of Stablecoin in the Ordinary Course and (II) Granting Related Relief.”
The “Committee” Statements in The Filed Motion
According to the Preliminary Statement, the Committee recognizes that the Celsius Network may eventually need additional liquidity to administer the Chapter 11 cases and emerge from the bankruptcy. The Committee also understands that the selling of stablecoin may be a less costly source of financing than, and preferable to, Celsius-in-possession financing, borrowing from decentralized finance protocols, or other sources of liquidity.
No matter, the Stablecoin Sale Motion must not be approved at this time. The ownership of the stablecoin is contested by certain creditors that transferred stablecoin to Celsius.
Well, at the outset of the Chapter 11 cases, Celsius identified the question of whether it or account holders own crypto assets held on the Celsius platform as one of the key issues in these cases.
In continuation, in the more than three months since the commencement of these cases and the forty days since the filing of the Stablecoin Sale Motion, Celsius Community have not met their burden to establish which crypto assets constitute property of the estate.
Although, the Committee understands that there is a need to move these cases forward in a deliberate manner and believes these matters can be briefed within the current sale timeline recently approved by the Court.
The Objection
As per the filing, Celsius may not sell Stablecoin that is not estate property. The Court should deny the Stablecoin Sale Motion at this time as Celsius have not established that the Stablecoin they seek to sell is estate property. Various creditors and state regulators have objected to the Stablecoin Sale Motion and several creditors have asserted an ownership interest in the stablecoin.
Background
Instead, to the point that the Celsius community demonstrate an immediate need to sell stablecoin. It must be noted that on July 13, 2022, Celsius filed voluntary petitions for relief in the United States Bankruptcy Court under Chapter 11 of the Bankruptcy Code. And at the first hearing, Celsius identified several “key legal questions” in these Chapter 11 cases.
Moreover, on September 15, 2022, Celsius filed the Stablecoin Sale Motion, requesting authorization “to continue to sell and/or exchange their Stablecoin for the U.S. Dollars” on “a post petition basis and consistent with past practice.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
