US Government Opposes Bankrupt Crypto Lender Celsius’ Plan!

Bankrupt crypto credit institution Celsius Plans to extend the restructuring plan by up to five months were challenged by creditors and the US government in legal filings on Wednesday.

Creditors and US Government Oppose Celsius’ Proposal to Extend Bankruptcy

Legal filings, bankruptcy cryptocurrency warns that plans to transform the credit institution into a “rescue company” are not a completed deal and the property may still be liquidated.

While the company outlined its plans to transform into a publicly traded “rescue company” on January 25, the filings indicated it needed to hurry to prevent rising attorney’s fees from depleting the property.

“These cases must move towards a settlement,” said an application filed on behalf of Celsius’ unsecured creditors.

“The lives and financial situations of many account holders have been disrupted by the past behavior of borrowers and some of their former directors and officers,” it said in the eight months since the company stopped withdrawals.

U.S. bankruptcy law allows a bankrupt company to present a restructuring plan for a limited period of time, normally four months, after which time other stakeholders, including the company’s creditors, can voice their opinions.

The creditors’ application stated that an offer that could offer liquid crypto to most creditors is “significant work to be done to finalize”, adding that while there is still no binding agreement or a decision on whether to include mining assets.

According to US Trustee William Harrington, a Department of Justice official, “there is no basis for prolonging this case for another five months just to submit and request a plan.”

Harrington said on Wednesday that it was “improper” to make another extension until June, with lawyers “consuming” what was left of the company’s assets.

A hearing on the matter is scheduled for February 15, chaired by Martin Glenn, a judge for the Southern District of New York.

*Not investment advice.