Bankrupt crypto-lending platform Celsius is facing federal investigation, according to court documents
New court documents reveal that bankrupt crypto-lending platform Celsius is facing a federal investigation as well as inquiries in 40 US states.
According to a recent filing, Celsius faces a “significant” number of investigations by government entities and could face prosecution and fines for allegedly mishandling customer funds.
says the filing,
“The number and scope of investigations into debtors by governmental entities is significant: Celsius is apparently the subject of enforcement actions or investigations in at least 40 states, in addition to investigations or inquiries involving the federal government.
The committee resisted requests by certain state regulators that the inquiry address such matters to avoid the cost and delay of such a comprehensive investigation…
The committee representing Celsius creditors says it does not want the court to launch its own investigation for fear of redundancy and wasted resources.
“A comprehensive investigative investigation may unnecessarily duplicate the investigation conducted by the committee, which is likely to waste property resources and reduce recoveries. In addition, such an investigation may delay the restructuring process, and result in significant professional fees and expenses…
Expanding the examiner’s scope to examine specific issues already examined by government agencies or securities regulators would be duplicative, costly, and inappropriate.
The committee continues to believe that the examiner should not spend much, if any, time overseeing ongoing state investigations, the proceeds of which are likely to result in charges, fines, or other penalties that will benefit state entities, and not the debtors’ creditors. “
Celsius stopped all withdrawals earlier this year, then filed for bankruptcy on July 13.
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