CELSIUS NETWORK FILES CHAPTER 11 BANKRUPTCY
In Vermont, Celsius Network (“Celsius”) is an unregulated cryptocurrency business that provides its clients with interest-bearing bitcoin accounts. Celsius declared that it would stop all withdrawals, swaps, and transfers between client accounts on June 12, 2022. The U.S. Bankruptcy Court for the Southern District of New York received a voluntary Chapter 11 bankruptcy petition from Celsius and many of its affiliates on July 13, 2022. With the help of reorganization, sale, or another method, Chapter 11 bankruptcy enables insolvent businesses to reorganize their debts.
A site that may be accessed at https://cases.stretto.com/Celsius houses public files. On that website, you may (and should) register to get email notifications of upcoming court filings. Yet, only a small number of bitcoin businesses in the US have initiated bankruptcy procedures. Due to the lack of legal guidance, it is unclear whether or not account holders would be allowed to sell or recover their bitcoin assets during a bankruptcy proceeding. Owners of Celsius accounts allowed the corporation permission to use, lend, sell, and rehypothecate the cryptocurrencies they deposited. In turn, Celsius used these resources in a range of lending, trading, and investment ventures.
Concerning how the bankruptcy procedure would impact their rights and the value of their investment in Celsius, Celsius investors may want to speak with their own legal counsel. The Department will keep an eye on the bankruptcy proceedings and send out updated notices should significant changes take place. Residents of Vermont should get in touch with the Department if they have any inquiries or want to make a complaint. You can submit a complaint via the Department’s website’s Securities division section at https://dfr.vermont.gov/consumers/file-complaint/securities.
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