According to reports, federal prosecutors in the United States are looking into the crippled cryptocurrency lender Celsius Network.
The bankrupt lender is subject to criminal prosecutions in as many as 40 US states, over “investigations or inquiries involving the federal government,” according to a filing by the Celsius Official Committee of Unsecured Creditors (UCC).
Because of recent events during its bankruptcy process, Celsius is now the subject of increased regulatory attention. The bankrupt lender has lately received questions from the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Commodities and Futures Trading Commission (CFTC). The bankruptcy court had already received motions from Texas and Vermont regulators to halt the lender’s planned stablecoin sale.
Due to a paucity of American legal precedents, Judge Martin Glenn, overseeing Celsius’ bankruptcy proceedings, stated in a document on October 17 that he intended to turn elsewhere for assistance in the matter.
The Law Commission of England and Wales’ “Digital Assets: Consultation Paper” is expected to be cited by the court.
Talking about the court’s supervision of the case’s designated examiner, the UCC’s legal counsel contended that focusing on the current federal investigations will probably benefit government agencies in the guise of fines and sanctions but be detrimental to Celsius’s creditors and stakeholders.
The UCC has voiced fears over the examiner-related costs, which are predicted to be close to $5 million in value.
Per the filing, “such amounts, if actually incurred, would warrant close scrutiny by the Committee, the United States Trustee, and any fee examiner in light of the Examination’s current Court-approved scope.”
Just days into suspending withdrawals for its customers in June, Celsius disclosed in a court filing that it had been summoned by American prosecutors to testify in front of a federal grand jury in Manhattan.
The subpoena’s requests’ specifics are yet undisclosed. A record of “regulatory agency inquiry or action(s)” was submitted with the subpoena as part of a larger revelation of the business’s financial dealings.
On-chain detective Alex Mashinsky, the creator and former CEO of Celsius, reportedly liquidated some hundred thousand (in value) CEL tokens throughout various wallets in a sequence of transactions, according to information released by Coffeezilla the week before.