Independent probe approved for Celsius bankruptcy case

Following concerning reports that Celsius Network may have been insolvent since 2019, an independent probe into the crypto lender’s finances has been approved by a federal judge.

An examiner will investigate how Celsius stores its cryptocurrency and whether it was paying yields to existing investors with the assets of new investors. The probe will also address concerns by regulators that Celsius used its own native token to prop up its balance sheet.

US Bankruptcy judge Martin Glenn signed off on the request for an independent examiner on Wednesday. The scope of the probe was reportedly narrowed down following negotiations between the lawyers of Celsius creditors and the US Trustee.

According to the filing, the probe will also examine:

• Why some customers experienced a change in account offerings from Celsius’ Earn Program to the Custody Service, while others were placed in a “Withhold Account.”
• Celsius’ tax-paying procedures and how compliant the firm was with respect to non-bankruptcy laws.
• The “current status” of Celsius’ mining operations.

However, the soon-to-be appointed independent examiner can request to expand the scope of the investigation if new information comes to light. Within seven days of an examiner being named, they must submit a work plan and budget for the probe.