A Celsius committee of creditors is investigating potential misconduct by Celsius and insiders.
The official statement singles out CEO Alex Mashinsky.
The committee has hired a law firm and other agencies to help with the process.
More developments are unfolding in the Celsius Network saga, as the Celsius’ Creditor Committee has announced that it will investigate potential misconduct of insiders. The Official Committee of Unsecured Creditors published an official statement saying that it was thoroughly investigating Celsius, “including potential misconduct by Celsius and its insiders.”
The statement describes several objectives of the committee. First, it wants to ensure that Celsius is effectively safeguarding the assets of account holders. Secondly, it wants to oversee the efforts to develop a business plan that reduces overhead and preserves the Debtors’ limited cash reserves.
But the key point is the third objective, where the committee wants to “thoroughly investigate the prepetition conduct of Mashinsky and other Celsius insiders, including the problematic asset deployment decisions, prepetition transfers, and other issues.” The Committee says that it has already started this investigation. Alex Mashinsky is the CEO of the platform in question.
The statement also said that the Official Committee of Unsecured Creditors was appointed on July 27. The committee is composed of seven individuals and entities from institutions.
The committee has hired law firm White & Case, restructuring advisor M3 Partners, investment bank Perella Weinberg Partners, and blockchain consultancy company Elementus. It is also working on hiring one more company to help set up a related website.
The investigation is another episode in the Celsius bankruptcy case, which has seen multiple ups and downs in the past few weeks. The latest development will not be welcome news to Celsius, which is trying to move through the bankruptcy process as smoothly as possible.
Lots of Drama Surrounding Celsius
A lot has happened in a short span of time for Celsius. The company tried to rehire its former CFO to help with the bankruptcy process, but withdrew its motion at the last minute. Meanwhile, some say that Celsius Network’s assets could be locked away for a long time.
The legal woes may mount as New York Attorney General Letitia James has asked Anchor and Celsius Network investors to speak out. At the same time, those already involved in the case are keeping a close eye on how Celsius is conducting itself. The next few weeks will be pivotal in how the case unfolds for investors, who are hoping that the bankruptcy process will result in reparations sooner rather than later.