Creditors Want to Put the Plans for Celsius's Bitcoin Mining Sale Under the Hood

Creditors Want to Put the Plans for Celsius's Bitcoin Mining Sale Under the Hood

Celsius's creditors have called the company's CEO's earlier assurances "empty and fraudulent" and want to prevent the bankrupt crypto lender from selling its mined bitcoin (BTC) reserves.

In New York, where the case is now being tried, the corporation files for bankruptcy. However, the creditors' attorneys said in a letter to the court that the intention to sell mined tokens had "not [been] detailed in any depth."

The creditors asserted that while they were not completely against the notion of a sale, they required additional details regarding the nature of the transaction and the intended use of the proceeds.

They demanded "boundaries and openness" from Celsius, and they requested that the court "condition its acceptance" of the sale proposal.

According to documents submitted by Celsius to the court, the mining division of the business—which declared bankruptcy the day after its parent company—owns more than 80,500 mining rigs, valued at over USD 750 million.

The subsidiary, Celsius Mining, stated plans to mine more than 10,000 BTC by the end of this year and requested approval for a public listing on the stock market in May. The company disclosed owning more than 151,000 BTC in April (USD 3.6bn at current prices).

Lead counsel for Celsius, Pat Nash, urged the creditors to hold off and adopt a long-term perspective last month. He advised them to wait for a recovery in market pricing because Celsius Mining was already producing BTC 14.2 day and hoped to expand its production.

The company has since altered its position and asked the court to allow it to convert its Bitcoin to currency in order to assist it in meeting its obligations.

In a separate statement to the court this week from creditors, the amount of mistrust for Celsius and its CEO Alex Mashinsky was even more apparent. They criticized Mashinsky's remarks, which were later deleted, that were made just five days before the company decided to freeze the assets of its clients as "empty and misleading promises."

The creditors expressed dissatisfaction in the statement, claiming that despite Celsius having "previously championed its transparency," it "mostly went silent" following its choice to freeze assets.

The creditors stated that they would work toward a "resolution that will maximize Celsius' value for the benefit of its account holders and unsecured creditors" and that they were "committed to properly examining Celsius, including potential misconduct by Celsius and its insiders."

The US Department of Justice has also requested more judicial supervision of Celsius' intentions to pay USD 409,000 in severance to 19 employees and sell BTC while company is in bankruptcy, according to Reuters.