- The DoJ has sided with regulators over the treatment of Celsius’ stablecoin holdings
- Celsius wants to liquidate $23 million worth of coins, but two regulators opposed the idea
- The DoJ has agreed with them, saying that there are too many unknowns to approve the sale
The Department of Justice (DoJ) has sided with two state regulators who opposed plans by Celsius to sell its stablecoin holdings, saying that it wants more information on the potential ramifications of the move. United States Trustee William Harrington filed the objection on Friday, saying that Celsius’ plan is to “impulsively distribute funds to one group of creditors” without a full understanding of its holdings compared to those of creditors, as well as no clear picture being given of the impact it could have on later distributions. Texas and Vermont regulators opposed the move last week, because it felt there was a risk of the company using the capital to resume operating in violation of state laws.
Celsius Wants to Repay Creditors With $23 Million Sale
Celsius asked the United States Bankruptcy Court for the Southern District of New York for permission to sell its stablecoin haul more than two weeks ago, saying that the sale would allow it to generate liquidity to help “fund the Debtors’ operations.”
However, Texas and Vermont regulators opposed the idea, saying that it was “not at all clear what the debtors intend to do with the proceeds of any such sales…and the degree to which Debtors’ use of sale proceeds will be supervised by the Court.”
DoJ Highlights Many Unknowns
The DoJ has seemingly agreed, with Harrington giving multiple reasons why the court shouldn’t allow it to sell its $23 million haul. Key among these was that there still isn’t a full understanding of Celsius’ crypto holdings or the relationship between what Celsius holds and what its creditors hold, and that the “ownership, segregation, or the impact of such sale on later distributions to creditors who may have stablecoins on deposit with the Debtor” have not been assessed.
Harrington concludes that, “Any distribution or sale at this juncture could inadvertently impact or limit distributions to other creditors in this case,” and with the DoJ on board, as well as two regulators, Celsius’ chances of being allowed to sell its stablecoins, at least for now, don’t look great.
