Celsius Withdrawals Must Remain Closed: Department of Justice
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American Trustee Disagrees with Celsius' Plans
Due to concerns raised by a representative of the U.S. Trustee Program, which oversees the management of bankruptcy cases, Celsius' plans to reopen withdrawals may be postponed. Celsius asked permission to transfer $225 million from its custody program and withheld accounts on September 1. A participant in the U.S. Trustee Program of the Department of Justice is now opposing that request. U.S. Trustee William K. Harrington opposed Celsius' plans to "reopen withdrawals for select customers concerning certain funds" held in custody and withhold accounts in a court document on September 30. Harrington criticized Celsius for their "premature" plans to release the money.
He continued that the firm's request would "impulsively distribute" money without fully comprehending its crypto holdings and inter-account crypto transfers. Additionally, it would disregard the connection between the balance sheet of the business and the cryptocurrency that creditors have deposited. Harrington noted that until an Examiner Report has been submitted, Celsius shouldn't be permitted to release payments. That report would explain whether the corporation mixed up funds and why its account offerings changed in April 2022.
Celsius' Plans to Sell $23 Million in Stablecoin Assets
According to related reporting, regulators in Texas and Vermont protested Celsius' plans to sell $23 million in stablecoin assets on Thursday. Harrington also opposed this sale in his filing. On June 12 of this year, Celsius first froze withdrawals before declaring bankruptcy a few weeks later. Users have been unable to access their cryptocurrency for three months due to these incidents.
Although clients could be frustrated that withdrawals get further delayed, it is unclear whether the court will accept the U.S. Trustee's complaint. On October 6, there will be a hearing to explore the issue.