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Celsius has temperatures rising as parties claim priority over lost equity

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A new faction of creditors have emerged in the Celsius [CEL] bankruptcy saga. Shareholders or investors with equity in the crypto lender have staked their claim for the bankruptcy payouts. Furthermore, these investors also filed a motion in the ongoing bankruptcy case. 

Celsius has temperatures rising

Milbank LLP, filed a motion in the ongoing bankruptcy proceedings on behalf of the shareholders. The motion demanded the appointment of an “Official Preferred Equity Committee” to represent shareholders that invested in Series A and Series B funding rounds of Celsius.  

The Celsius Series B funding round was led by equity firm WestCap, and Caisse de dépôt et placement du Québec (CDPQ) in October 2021. The round closed after raising $400 million at a valuation north of $3 billion. Furthermore, in November 2021, Celsius revealed that the round had been oversubscribed. This brought the total funds raised from Series B to a whopping $750 million.

To say that shareholders are lining up for their share of the pay-out would be inaccurate. On the contrary, shareholders are asking for a higher priority than the original victims, the account holders. Shareholders wish to skip the que and want to be the first ones to benefit from the sale of certain assets.

New token to deal with debt?

Celsius owes almost $5 billion to half a million creditors. Executives at the bankrupt company are now looking to turn their debt into a crypto token. An audio of an internal meeting at Celsius was shared by Tiffany Fong, a popular Celsius victim. CTO Guillermo Bodnar can be heard outlining a plan to issue IOU cryptocurrencies to customers with regards to their compensations. 

Furthermore, Celsius co-founder, Nuke Goldstein, also explained how “wrapped tokens” will serve as an IOU for customers who were a part of Celsius’ Earn accounts. The tokens will reportedly represent the ratio between what Celsius owes customers and what assets they have available. The plan as of 24 September stood in the “early stages”.

It’s getting hot all around 

Last month, another faction of claimants emerged. This was made up of  Celsius Withhold Account holders from U.S states where Celsius was barred from offering custody accounts.

This group was looking for a payout to the tune of $14.5 million. This amount was a drop in the bucket compared to the $12 billion that Celsius boasted of right before it halted withdrawals back in June. 

Additionally, the Washington State Department of Financial Institutions filed a motion to become party to bankruptcy proceedings. Assistant Attorney General Stephen Manning asked the presiding judge to admit him on behalf of Washington’s financial regulator. An increasing interest in Celsius case can be seen from state regulators.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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