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Washington State Steps Into Celsius Network Bankruptcy Case

Celsius was grilled by state watchdogs for alleged “financial mismanagement”.

In a recent turn of events, Washington’s Assistant Attorney General Stephen Manning filed a September 22 motion for Judge Martin Glenn to represent the Washington State Department of Financial Institutions.

The file was

“I certify that I am a member of good standing with the Washington State Bar and, where applicable, the Bar of the United States District Court for the Western District of Washington and the United States Court of Appeals for the Ninth Circuit.”

  • The crypto lender first froze customer withdrawals in June, blaming it on “extreme market conditions.”
  • Shortly thereafter, around 150 employees were laid off and restructuring consultants from a consulting firm, Alvarez & Marsal, were brought on board to “preserve and protect assets”.
  • The following month, it filed for Chapter 11 bankruptcy protection, and the subsequent filing in the Southern District of New York revealed the depth of its financial woes. Celsius reportedly owes approximately $5 billion to 500,000 creditors.
  • Since then, state securities regulators from Texas, Vermont, Wisconsin and now Washington have pushed for more transparency.
  • Vermont’s Department of Financial Regulation (DFR) raised serious allegations against the ailing crypto lender. To assert that Celsius has been insolvent since 2019, the DFR later allegedly that in reality the platform was never profitable enough to pay out the promised earnings.
  • Celsius has also been accused of market manipulation and increasing the price of its native CEL token.
  • The US Department of Justice also required a court-appointed examiner to ensure that Celsius provided accurate information to creditors.

Source: Crypto News Deutsch

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