Celsius Bankruptcy Follow-up Ep.4: The Oct 20 Hearing Update and More

Do you still recall that Celsius, the troubled crypto lender in its ongoing bankruptcy, has filed against a cryptocurrency custodian Prime Trust on August 23 this year??Celsius attempted to claw back the $17 million in crypto that is allegedly held by the Prime Trust . Good news came from the Oct 20 hearing where Prime Trust was ordered to return all the coins to Celsius.

In late September, Fazzaco went through?all the tribulations Celsius had gone through since the suspension of deposit and withdrawals . Now, another month has passed, why don't we take a look at the whole bankruptcy case in this rare yet victorious moment for Celsius, and see if it is showing a hopeful side.

The Diaspora of Executives

We witnessed the departure of executives of the crypto lender one after another since late September. Unlike the Captain of the doomed RMS Titanic, who silently walked into the ship's wheelhouse on the bridge and died like a martyr when it was engulfed, the "captain" of Celsius, another giant ship that is sinking, chose to jump on a lifeboat before anyone else did by?resigning his office as the CEO on September 27 . To quote him, "I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing".

Chris Ferraro, the former CFO of Celsius, was appointed to replace him as?the?interim CEO . The Unsecured Creditors Committee, an organization of depositors, described the executive change as "a positive step" towards resolving the cases against Celsius.

In addition, in October,?JPMorgan Chase & Co. has hired Aaron Iovine, a former executive of Celsius , as its new head of digital assets regulatory policy. Iovine Joined Celsius in this February and left in September, two months after the crypto lender's bankrupt.

Founder Allegedly Made A 10 M USD Withdrawal before Client Accounts Froze

The fact that the former CEO getting cold feet and backing out only fueled the conspiracy. In early October, someone claimed to be familiar with the matter said that the founder?Alex Mashinsky withdrew $10mn from the crypto lender just weeks before the company froze customer accounts . A spokesperson of Mashinsky later commented, "In mid to late May 2022, Mr Mashinsky withdrew a percentage of cryptocurrency in his account, much of which was used to pay state and federal taxes. In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totalled what he withdrew in May."

Another source of information claimed that around $8mn of the assets Mashinsky withdrew was used to cover taxes that arose from income the assets had generated on Celsius. The remaining $2mn was units of Celsius's native "CEL" token. The withdrawal had been pre-planned and was linked to Mashinsky's estate planning, the person added.Read More Here