Celsius shareholders want their own legal representation in bankruptcy case
Celsius Cryptocurrency
Modified Date:- Published Date:-Categories: Cryptocurrency
Celsius shareholders want their own legalrepresentation in bankruptcy case
Celsiusshareholders haverequested an official legal representation that would represent their interestin the bankruptcy proceedings, according to a Sept. 22 court filing. Accordingto the filing, there is a clear need for this fiduciary representation as thereare only two economic stakeholder groups — retail customers and equityholders.
Theshareholders claim the Unsecured Creditors Committee (UCC) is focused onensuring that retail customers get maximum value without considering equityholders. It means no one adequately represents Equity holders’ interests, andany reorganization plan might affect their interests.
Shareholderswant Celsius to ‘dollarize’ its retail crypto holding
Anothernotable aspect of the motion is that the shareholders want Celsius to “dollarize”the crypto holdings of its customers. According to the filing, Celsius’intention to return customers’ crypto instead of the fiat value of the asset isin contravention of the Bankruptcy Code, and it “could negatively impact theEquity Holders’ recovery.”
If thismotion is accepted, any increase in the value of cryptocurrencies during theproceedings will likely go to the equity holders. A hearing on the filing isset for Oct. 6, the same day court appearance and claim processes are expectedto begin. However, objections to the motion can be submitted until next week.
CelsiusIOU tokens
A recentlyleaked audio file suggests that Celsius might plan to repay itscreditors using crypto IOU tokens. In the leaked audio recording of ameeting, the firm’s chief technology officer and co-founder Nuke Goldstein saidthe company plans to wrap each customer’s debt into an IOU token that “representsthe ratio between how much we really owe and how much we have.”Anotherleaked phone call reveals that Celsius CEO Alex Mashinsky has shared the ideawith the UCC and got a positivereaction.
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