Sasha Hodder – founder of Hodder Law Firm – has mentioned the U.S. trustee overseeing the Celsius Network bankruptcy proceedings is seeking the aid of an independent examiner due to the company not being transparent enough.
Is Celsius Trying to Hide Something?
Right now, Hodder is saying that the company and its CEO Alex Mashinsky have not been fully clear or honest about what kind of creditors are owed money, nor have they gone into detail about how much is owed. She stated in an interview:
If [Mashinsky] was being transparent, [the trustee] would not have a need to pull in an independent examiner.
Celsius Network is a crypto lending platform that a few months ago, announced it was halting digital currency withdrawals as a means of fighting ongoing volatility and market uncertainty. Cryptocurrencies have been struggling hard to retain their prices to no avail, with assets like bitcoin (which reached a new all-time high of $68,000 per unit in November of last year) now working their behinds off just to maintain positions in the low $20K region.
However, things didn’t quite end there as Celsius later announced it was filing bankruptcy. This was a move to help the company explore other options of remaining in business while preventing customers and traders associated with its platform from taking drastic or legal action against executives to obtain their money. Hodder commented that:
[Celsius is] burning through the money very quickly.
In addition, Celsius has stated that if things don’t turn around soon, it could potentially run out of all its money by the end of October, which only gives it another month or month and a half of remaining in operation. Chief financial officer Chris Ferraro says things will need to turn around significantly in the coming weeks if Celsius is going to get back on top and they’re hoping to land some new investors soon.
Hodder further stated:
No one has been able to get any straight information out of Celsius CEO Alex Mashinsky about how much they owe certain creditors… We need more transparency. [Of] the top 50 debtors, only ten of them are known.
Hodder also claimed that there were signs as early as April that the market was not doing well, and that Celsius may have had opportunities to act upon its waning financial position early and failed to do so. She commented that the company instead asked customers to increase their BTC holdings to ensure it had enough collateral to deal with any volatility-related issues it was experiencing. She said:
It was disheartening for everyday investors.
Stop Spending So Much!
She also stated that the company is spending way too much every day despite its ongoing legal proceedings. She mentioned:
The probe into that criminal case may show that the creditors were lied to.