Bankrupt Crypto Lending Platform Celsius Faces Federal Investigation, According to Court Documents

New court documents reveal that bankrupt crypto lending platform Celsius is facing a federal investigation as well as inquiries in 40 US states.

According to a recent filing, Celsius faces a “significant” number of investigations by government entities and could face charges and fines for allegedly mismanaging customer funds.

Says the filing,

“The number and extent of investigations of the debtors by governmental entities is significant: Celsius is apparently subject to enforcement proceedings or investigations in at least 40 states, in addition to investigations or inquiries involving the federal government.

The Committee opposed requests by certain state regulators that the Examination address such matters to avoid the costs and delay from such a wide-ranging inquiry…

The committee representing Celsius creditors says it doesn’t want the court to launch its own investigation for fear of redundancy and wasted resources.

“A wide-ranging Examiner’s investigation could needlessly duplicate the investigation being conducted by the Committee, which would likely waste estate resources and reduce recoveries. Additionally, such an examination could delay the restructuring process, and result in significant professional fees and expenses…

Increasing the Examiner’s scope to investigate specific issues already being investigated by state agencies or securities regulators would be duplicative, costly, and inappropriate.

The Committee continues to believe that the Examiner should not spend much, if any, time monitoring ongoing governmental investigations, the proceeds of which will presumably result in charges, fines, or other penalties that will benefit governmental entities, and not the debtors’ creditors.”

Celsius halted all withdrawals earlier this year, and then filed for bankruptcy on July 13th.

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