“Sham” alleges Celcius Investors as the company eyes for merging entities

Crypto lender Celsius Network alleged a “Sham”  by new court filings when they revealed that they want to combine their United Kingdom and United States entities.

Back in June 2021, defunct crypto lender Celcius Network Limited was issued with a notice by the Country’s Financial Conduct Authority to cease its operation in the United Kingdom. Celsius Network Limited created and set up a Limited Liability Company in the Delaware state looking to transfer its assets to the new company to avoid its fallout.

Celsius Network’s Explanation 

May 1 court filing by the Bankrupt Crypto firm revealed that intercompany chaos was generated due to the migration of both entities and the filing further adds that formal documentation of the intercompany relationship was “not completed for several months” and when it was “it remained ambiguous” what transactions the agreements affected. The company’s filing further added that the transfer would confuse and it will become hard to make sense for everyday investors whereas Series B the more “sophisticated” investors were aware of the implications.

And just so that it doesn’t go in favor of the Series B investors and the smaller investors getting ignored during the time of recovery and return of lost funds, both the entities should be treated as one and the same while the bankruptcy proceedings as well.

Allegations by the Unsecured Creditors Committee

Celcius Official Committee of Unsecured Creditors court filings state that the migration of both entities is a scam and that the assets transfers between the two worth billion are fraudulent.

Due to the Celcius Collapse, Simon Dixon reportedly lost $8.8 Million worth of Bitcoin. He summarised in his tweets on May 2 about the entire series of UCC filings. He further alleged that the company acted of never knowing the migration and to clearly distinguish between the two entities the company provided poor documentation and gave no clear distinction. 

Chief U.S. Bankruptcy Judge Martin Glenn In a March 9 memorandum opinion, found that a lot of customers had claims against the LLC company setup by Celsius which meant that the Series B investors had higher chances to receive their compensation.

Major firms including crypto exchanges like Coinabse and Gemini are eyeing the remaining assets of defunct Crypto firm Celsius whose auction is set to happen on Wednesday, May 3.

Currently, the “stalking horse bidder” of the auction is NovaWulf Digital Management “stalking horse bidder,” a term used to describe the first mover that sets the bar for the ensuing bids. The proposal laid by NovaWulf will include a direct cash transfer in the range of $45-55 million and with the acceptance of Novawulf’s proposal almost 70% of the funds can be recovered.

The auction will be very significant for the celcius customers to recover their money.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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