According to a filing made on October 18 by the Celsius Official Committee of Unsecured Creditors (UCC), the crypto lender is facing enforcement actions in up to 40 U.S. states, as well as “investigations or inquiries involving the federal government.”
Celsius is a financial technology (fintech) network that provides interest-bearing savings accounts, borrowing, and digital and fiat payments. Celsius rose to prominence by offering interest on cryptocurrency deposits. The platform, which was once hailed as a very viable project, met its demise earlier this year when crypto prices plummeted.
The number and extent of investigations of the debtors by governmental entities is significant: Celsius is apparently subject to enforcement proceedings or investigations in at least 40 states, in addition to investigations or inquiries involving the federal government
counsel said in the last week filing.
The Committee representing Celsius creditors says it doesn’t want the court to launch its own investigation for fear of redundancy and wasted resources.
A wide-ranging Examiner’s investigation could needlessly duplicate the investigation being conducted by the Committee, which would likely waste estate resources and reduce recoveries. Additionally, such an examination could delay the restructuring process and result in significant professional fees and expense
Celsius suspended all withdrawals earlier this year before declaring bankruptcy on July 13. Because of recent developments in its bankruptcy proceedings, the lender is under increased scrutiny from multiple regulatory agencies.
Recently, the SEC, Federal Trade Commission, and the Commodities and Futures Trading Commission have all sent inquiries to the bankrupt lender.
Texas and Vermont regulators had previously filed motions in bankruptcy court to prevent the lender from selling stablecoins.
Celsius revealed in a court filing earlier this month that it had been summoned by US prosecutors to appear before a federal grand jury in Manhattan, just days after it suspended withdrawals for its users in June.
On-chain sleuth Coffeezilla revealed last week that Alex Mashinsky, the founder and former CEO of Celsius, dumped hundreds of thousands of CEL tokens across multiple wallets in a series of transactions.
Federal agencies in the United States have been looking into cryptocurrency lending projects for a while. Earlier this year, the SEC allegedly launched an investigation into Celsius Network, Voyager Digital, and Gemini Trust. The organization hasn’t filed any formal charges against any of them.
