Celsius Creditors Trying to Stop Company Selling Bitcoin

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  • Celsius creditors are trying to stop the company from selling its mined bitcoin
  • Celsius Mining filed for bankruptcy the day after Celsius in mid-July
  • Lawyers for creditors demanded to know the details of any potential sale and where the money would go

Celsius creditors are trying to stop the company from selling its mined bitcoin and have pressed it on “potential misconduct” by Celsius and its “insiders”. The bitcoin in question belongs to Celsius Mining, an offshoot of the main company, which filed for Chapter 11 bankruptcy just a day after Celsius last month. Lawyers for the creditors have demanded to know where the money will go, and even questioned Celsius’ competence in carrying out the sale.

Past Practice Raises “Significant Questions” Over Celsius’ Actions

The request for Celsius Mining to hold onto the assets under its control was made by attorneys representing the committee of creditors this week in a court filing, after the subsidiary said that it intended to sell its bitcoin in order to free up some much needed cash. However, attorneys for the creditors have asked for more insight into the intended sale of the mined Bitcoin, including how selling it will be carried out and how the proceeds from the sale will be used.

Celsius Mining initially said that it would use the funds to pay back creditors and clients, but this proposal has since drawn criticism from the U.S. Department of Justice and now the creditor committee. In the filing, the attorneys pulled no punches in decrying the business practices of the Celsius board and questioned whether they were the best people to make such a call:

“…rather than giving comfort, notions of the Debtors acting “consistent with past practice” and “in the ordinary course of business” raise legitimate concerns. Those concerns are rooted in the significant questions regarding how the Debtors operated their businesses prepetition.”

Celsius Mining was turned into a serious entity in 2020 when the company raised $300 to expand operations, and had filed a notice to go public in May this year, just two months before its parent company collapsed.