Creditors of Celsius Network LLC, a bankrupt cryptocurrency lending company, have asked a bankruptcy judge for help in discovering FTX users’ identities. Creditors have reason to think that these people engaged in “questionable cryptocurrency transactions” that might have affected the market price of Celsius’ proprietary token over the preceding year.
The primary goal of the subpoenas issued by Celsius Network is to obtain details on specific individuals who might have records of “suspicious” trading activities for the past year. Creditors have been attempting to get details on ten cryptocurrency wallets linked to potentially fraudulent April–August deals involving Celsius’ CEL token.
Since some deals were made before Celsius Network filed for Chapter 11 bankruptcy, they might be important in the bankruptcy case. Creditors need access to trader identities to determine whether CEL prices were artificially inflated to the detriment of Celsius Network.
The committee hired Elementus, a blockchain consultant, to help spot unusual financial dealings. The subpoena application was filed in court on April 26 in which they stated:
Elementus identified 947 transactions involving a near one-to-one relationship of CEL Token deposits and withdrawals between ten private wallets and ten FTX-operated wallets over three days.
The committee representing Celsius Network’s creditors needs to know if trades involving CEL were made to raise its price artificially. They claimed the data they’re trying to get from FTX is crucial to establishing their case.
According to court filings, the committee was interested in learning about irregular trades and any short positions placed on CEL that may have negatively impacted its price.
Celsius Network’s bankruptcy plan estimates CEL to be worth 20 cents on the petition date. But the debtors are disputing this price, saying that suspicious trades suggest the token’s value was artificially inflated.
