Celsius network has filed a motion to extend the prior schedule for the Bar Date before Martin Glenn, Chief United States Bankruptcy Judge. According to court filings by Kirkland & Ellis LLP – the legal counsel serving as restructuring advisor to Celsius – the motion will be held on January 10, 2023, at 11:00 a.m., prevailing Eastern Time. However, due to prevailing conditions, the motion hearing is expected to be conducted remotely using Zoom for Government.
While the company has accumulated hundreds of millions in debt to customers and investors, Celsius has only committed approximately $44 million. Notably, over 17,200 claims were filed by Celsius creditors as of December 29, 2022. Thereby ballooning the burden of Kirkland & Ellis LLP in the restructuring process.
Nonetheless, Celsius victims are not interested in the restructuring process but only want their money returned. Over six months later, the Celsius network is still hiding behind legal shadows and lengthy court proceedings to distract the real attention from creditors and affected users.
Celsius Stakeholders Losses Patients on Bankruptcy Proceedings
At the time Celsius network filed for voluntary Chapter 11 proceedings to provide an opportunity to stabilize its business, approximately $167 million in cash was available to facilitate operations. As the bankruptcy proceedings take longer, Celsius users are worried more cash is being spent on legal fees instead of refunding creditors.
Moreover, the company halted withdrawals, swaps, and transfers between accounts citing ‘extreme market conditions’. The company’s predicaments have escalated after Bitcoin miner Core Scientific (CORZ) announced it will shut down over 37,000 crypto mining rigs. Nonetheless, Celsius indicated that its is does not oppose the closure of Core’s mining rigs due to its financial obligations.
“Celsius does not oppose the relief sought in the Rejection Motion—indeed, Celsius believes the Celsius Contracts are even worse for Core economically than what Core believes. Further, Celsius will agree that Core can power down all of the Celsius rigs on January 3rd to stop the losses that Core alleges it suffers from continuing to perform under the Celsius Contracts,” Celsius noted.
The company’s legal protection comes at a time the United States is grappling to regulate the crypto market to protect investors from predatory projects.
For instance, federal agencies – including the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) – have issued a joint warning statement on related crypto assets risks to financial institutions.