June 3, 2023

Bankrupt Crypto Lender Celsius Failed to Record 7000 Transactions

Crypto Lending platform Celsius filed for bankruptcy in 2022 when the firm was dealing with the accusations of extensive re-hypothecating of its assets. However, a recent report has suggested that Celsius management failed to keep proper records of internal transactions.

The crypto lender has recently filed a claim against its affiliate enterprises in lieu of payables in a New York court.

However, the failure to properly record all these transactions has created an issue of inability to produce or reconstruct official records. Celsius Network LLC has claimed $9.1 billion in payables against Celsius Network Limited.

The prosecutor in the case has made use of the records and bookkeeping data to file the claim against CNL. CN LLC has maintained that the inability to maintain proper records is not a viable excuse to waive off the payment claims. The firm has estimated a total of 7000 transactions lost that took place during three months.

The firm has presented its sales plan under its Chapter 11 bankruptcy filing. The books records submitted by Celsius during the bankruptcy filing are taken as the financial records under consideration.

An independent audit of the firm records has revealed that the firm failed to keep proper records of its dealings with affiliate companies on several occasions.

Lack of Accurate Record Keeping

Celsius’s record has shown that the company failed to ensure accurate record keeping to the effect that a correct reconstruction of these records seems impossible.

The statement issued by the court further maintained that in case if it was possible to recreate these records, it would require considerable time and expense.

It is worth noting that during the bankruptcy filing of the firm, the court declared that the customer funds worth $12 billion were mostly assigned as a property of Celsius. This assignment took place on account of an ambiguous customer agreement.

The latest filing has revealed that careful estimation of the total payable for Celsius affiliates has been valued at $3.5 billion.

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