Creditors Seek To Prevent Celsius From Selling Mined BTC

Creditors seek to prevent Celsius from selling mined BTC reserves and have called prior attempts to reassure them as empty and misleading. Celsius has filed for bankruptcy with the matter currently tried in New York.

However, the idea to sell mined tokens had not been disclosed in any depth, according to a document the creditors’ attorneys sent to the court.

Creditors Seek to Prevent Celsius From Selling Mined BTC

The creditors argued that while they weren’t entirely against the concept of a sale, they required more details regarding the deal’s specifics and how the proceeds would be used.

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 a 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 the company is in bankruptcy, according to Reuters.

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