Creditors of Bankrupt Crypto Lender Argue for Higher Valuation
Some creditors of the bankrupt crypto lender are arguing that it should be valued at a higher price of $0.80, the nominal price when the company collapsed. However, the trading price on the day the crypto lender filed for bankruptcy was $0.80. The company argues that the trading prices don’t reflect reality due to market manipulation. The court could even value it at a lower or zero price, similar to what stockholders could expect in bankruptcy.
Key Points:
– Creditors argue for a higher valuation of $0.80 for the bankrupt crypto lender.
– The trading price on the day of bankruptcy filing was $0.80.
– The company claims the trading prices were manipulated.
– The court could value the lender’s token at a lower or zero price.
– Judge rejects token holders’ request to participate in bankruptcy negotiations.
Judge Martin Glenn also rejected the request of two token holders to participate in the bankruptcy negotiations. He emphasized that his decision does not determine whether crypto tokens are securities under federal securities laws. Celsius’ management has proposed a valuation of $0.25 for the token as they aim to wind up the company’s affairs and sell it to crypto consortium Fahrenheit. This valuation is higher than the previous $0.20 proposed. In January, an independent examiner appointed by Judge Glenn revealed that the market in CEL was largely created by the company itself, benefiting insiders such as the former CEO, Alex Mashinsky, who has been arrested on charges of market manipulation.
Hot Take:
The valuation dispute highlights the challenges of determining the true value of crypto assets in bankruptcy cases. With allegations of market manipulation and regulatory concerns, it is crucial for the court to carefully consider the evidence and protect the interests of all parties involved.
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