November 29, 2022

The Queens County Citizen

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Bankruptcy Process at Celsius Network | Caisse and other unsuccessful shareholders

Bankruptcy Process at Celsius Network |  Caisse and other unsuccessful shareholders

The debacle of the Celsius network left the Caisse Depot et Placement du Québec (CDPQ) and its other stakeholders with only scraps. Cryptobank owners unsuccessfully seek better representation during bankruptcy proceedings.

Posted at 11:55 am

Julien Arsenault

Julien Arsenault
Press

Beginning the process of selling the company’s assets on Monday, a New York bankruptcy court rejected a petition filed last September by shareholders who sought the formation of a committee to represent them. The reason? The Celsius network is “irretrievably bankrupt”.

“Plaintiff has not demonstrated that there is a substantial likelihood of recovery,” the 15-page document reads. In principle, a shareholders’ committee should not be appointed when the debtor appears to be irretrievably insolvent. »

Quebecers’ wool reserve has already canceled a 200 million investment in the controversial cryptobank, its name appeared in a request filed last month. She alleged that “everything” in the bankruptcy process revolved “around the depositors” and that shareholders were not adequately represented.

The deposits of 1.7 million savers, which were frozen last June, are at risk. The sale of Celsius Network assets will enable them to limit their losses. The turn of shareholders like CDPQ will only come if there is money left over, which is unlikely.

“Accounts Receivable’s CFO testified that current liabilities exceeded (Celsius Network’s) assets by approximately $329 million,” the ruling said.

CDPQ did not comment on Monday’s New York bankruptcy court decision. The company said it was still evaluating its “legal options” in the case.

Like other cryptobanks, Celsius Network has pooled cryptocurrency deposits. It offered loans to depositors and interest, which could sometimes reach up to 17%.

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The company, which has been described as a business model similar to a Ponzi scheme, filed for US bankruptcy law last July. It has been plunged into a liquidity crisis due to the fall in the prices of cryptocurrencies that started at the beginning of the year.

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  • 24 million US
    That’s the amount Celsius Network executives withdrew in the weeks before the freezing of deposits decreed last June.

    Courts of New York