Celsius Network Files Complaint Against EquitiesFirst in Bankruptcy Case
Recently, Celsius Network, a cryptocurrency company that faced bankruptcy in July 2022, has taken legal action against EquitiesFirst, a private lending platform. The objective is to recover assets that were lost during the bankruptcy process. This move wasย created evident in a sealed bankruptcy document filed by Celsius on September 6. The document seeks injunctive relief and a declaratory judgment related to the recovery of money and property.
Celsiusโs co- founder and former CEO, Alex Mashinsky, was arrested earlier this year on charges of fraud. The Unitedย States attorneyโs office in Manhattan charged Mashinsky with multiple criminal counts, including securities, commodities, and wire fraud. As a result, a court filing on September 5 ordered the freezing of Mashinskyโs assets, including bank accounts in numerous financial institutions.
Furthermore, Celsius filed a separate summons on the same day, requesting EquitiesFirst to respond to the complaint within 35 days. This legal action is a wholeย lotย of development in the ongoing bankruptcy case.
EquitiesFirstโs Debt to Celsius: $439 Million
According to a report by the Financial Times in 2022, EquitiesFirst owes Celsius Network a staggering $439 Million. This debt represents a substantial portion of Celsiusโs assets, which thousands of its customers are relying on to recover their lost savings. EquitiesFirst has been repaying Celsius $5 Million per 30ย days in both cash and Bitcoin.
Details of this debt resurfaced in Celsiusโs bankruptcy filing, where the company disclosed its liabilities and assets. Asย ofย now, creditors of Celsius Network are voting on a bankruptcy-escape plan that involves selling assets to the Fahrenheit consortium. If approved, creditors could expect to recoup 67% to 85% of their holdings. The outcome of this vote will have a wholeย lotย of impact on futureย ofย the Celsius and its stakeholders.
Hot Take: The Legal Battles and Debt Crisis of Celsius Network
The ongoing legal battles and debt crisis involving Celsius Network and EquitiesFirst highlight theย dangers and challenges inherent in the cryptocurrency industry. It serves as a reminder that even prominent corporations in the field are not immune to financial difficulties and fraud states. The outcome of these legal proceedings wonโt be only impact the parties involved but likewise have broader implications for the cryptocurrency community. It emphasizes the importance of due diligence and management of risk when engaging with cryptocurrency assets. As the industry continuesย to evolve, regulatory frameworks and safeguards need to be strengthened to protect investors and encourage trust in the market.
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