A federal judge has approved the use of an independent examiner probe in crypto lender Celsius bankruptcy case. US bankruptcy Judge Martin Glenn ruled that the scope of an independent examiner would include speculation of several areas including Celsius’ crypto holdings.
Additionally, an independent examiner will also look into why there was a change in account offerings from the Earn Program to the Custody Service for some customers while others were placed in a ‘Withhold Account’.
The examiner would also investigate Celsius’ procedures for paying various taxes and the current status of the utility obligations of Celsius’ minting business.
Celsius has also introduced a proposal by which a still-being-built mining enterprise will allow it to generate sufficient revenue to continue operating. In August, officials of the U.S. government requested an independent examiner for Celsius bankruptcy.
The U.S. trustee cited the lack of transparency about the actual financials and customers’ unawareness regarding who holds what account and why.
Last week, Celsius and a group of its creditors agreed that an independent government examiner should investigate the firm as it proceeds further in the bankruptcy case.
On the other hand, BnkToTheFuture CEO Simon Dixon said the scope of the examiner’s probe has been narrowed since the motion was first submitted so that Celsius won’t run out of money. He also pointed out that Celsius Network CEO Alex Mashinsky would need to provide information about his withdrawals before the freeze.
The latest ruling also mentioned that the scope of the examiner probe could be expanded if deemed necessary after consultation with Celsius and the official committee of unsecured creditors.
Celsius has to present all documents the examiner reasonably deems relevant to carry out the investigation. However, Celsius can reject the request, which then will be decided by the courts.
