Regulation
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Regulators say firm could use proceeds to reopen in violation of laws
State regulators in the states of Texas and Vermont have filed a lawsuit against plans by crypto-credit platform Celsius Network to sell its stablecoin holdings. Representatives from the state of Texas expressed concern in the document that Celsius could resume illegal operations in the state after the sale of these assets. The Vermont state regulator made similar assumptions.
In early June, Celsius Network ran into difficulties due to “extreme market conditions” and began restructuring its business by bringing in outside consultants and lawyers. Since mid-June, the company has suspended all withdrawals, swaps and transfers between accounts.
Celsius, which is currently filing for bankruptcy, asked the court on September 15 for permission to sell its stablecoin assets in order to obtain liquidity to finance its own activities. At the moment, such assets of the company are estimated at $23 million.
Regulators’ objections to Celsius’ application are also based on the fact that the company did not set out exactly what the funds received from the sale of stablecoins will be spent on. At the same time, it remains unclear how the spending of these funds can be controlled by the court. A hearing to accept or deny Celsius’s request will take place on October 6.
According to the latest financial report, published in August, the difference between the liabilities of the bankrupt company and its assets was $ 2.85 billion. At the same time, it was reported that Celsius’s cash would run out by October this year.
Also, in early September, it became known that Celsius had suffered significant losses since the beginning of 2021, but hid this fact from investors, despite legal requirements to disclose its financial position.
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