Bankrupt crypto lender Celsius Network has revealed its filing for the sale of its stablecoin holdings. All documents related to the case were filed with the US Bankruptcy Court for the Southern District of New York. In addition, the lending company states that it will sell its current and future stablecoins that are yet to come.
On a clear note, the main intent of this sale by Celsius is to fund the Chapter 11 case, which was filed two months ago. Earlier in mid-July, the crypto lender filed for Chapter 11 bankruptcy after a $2 trillion cash collapse. This intolerable situation affected a large number of retail investors to face a huge loss at that time.
Now, the bankrupt cryptocurrency lender Celsius is awaiting a hearing in the case on October 6, 2022. As all relevant documents have been submitted to the court, legal action regarding the sale of stablecoins will be discussed.
In addition, the disclosed documents reveal that Celsius owns approximately 11 different forms of stablecoins worth $23 million.
Chapter 11 bankruptcy case of Celsius
The most important reason for the percent to enter the trap of a liquidity crunch is due to bearish market conditions. Moreover, the cryptocurrency lender was collapsing during the market crash with the collapse of all cryptocurrency prices. Specifically, because of the popular TerraUSD and Luna tokens in May.
Thus, when the entire crypto market collapsed, Celsius Network immediately stopped the withdrawals and transfers of its users. In fact, “stopping withdrawals was difficult but necessary,” adds the Celsius team.
Now the sale of the Stablecoin case is directed to the chief US bankruptcy judge, Martin Glenn. More so, as the main objective of this sale is to generate liquidity for Celsius operations. So the sale procedure will be paid directly to the company.
In addition, the US court appoints an independent examiner in the Celsius bankruptcy case. In order to monitor crypto assets, tax payment systems and oversee the current state of the miner to gather more information.
In the end, the loss is not only for Celsius Network, but also for other crypto lenders who are facing a terrible year in 2022. The collapse of the Luna community tokens has thus affected the major players in the industry causing huge losses in a short period of time.
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