Key takeaways:
- To recover assets, insolvent cryptocurrency lender Celsius Network has filed a complaint against lending company EquitiesFirst Holdings.
- Indianapolis-based EquitiesFirst Holdings owed Celsius Network $439 million as of July 2022.
In an effort to recover assets, insolvent cryptocurrency lender Celsius Network has filed a complaint against lending company EquitiesFirst Holdings.
Celsius is requesting injunctive relief and a declaratory judgment related to the “recovery of money/property,” according to a confidential adversarial complaint submitted on September 6.
EquitiesFirst and its CEO, Alexander Christy, were both included as defendants in the filing. Celsius also issued a summons on the same day, forcing the private lender to submit a motion or response within 35 days.
According to reports, Indianapolis-based EquitiesFirst Holdings owed Celsius Network $439 million as of July 2022.
Due to the “lack of institutional lending available to cryptocurrency companies” at the time, Alex Mashinsky stated in a subsequent bankruptcy declaration that Celsius first started obtaining collateralized loans from EquitiesFirst in 2019 to “support its operations.”
However, when Celsius Network tried to get its hands on the collateral it had guaranteed to EquitiesFirst in July 2021, the lender warned them that they could not get their money back.
EquitiesFirst owed Celsius $439 million as of July 2022, which was made up of $361 million in cash and 3,765 Bitcoin.
A prominent victim of the 2022 bear market, Celsius Network filed for Chapter 11 bankruptcy protection on July 14, 2022. Alex Mashinky, the former CEO of Celsius, was detained on July 13 of this year after being charged with cheating investors of billions of dollars and misleading Celsius users.
An interesting fact is that the Federal Trade Commission fined Celsius $4.7 billion for allegedly “duping” users, but the judgment was deferred so that the platform could use the assets in its bankruptcy procedures.
Voting on a settlement proposal for Celsius creditors is presently underway. If approved, Fahrenheit, a group of investors, would purchase Celsius’ assets and restore funds to Celsius creditors by founding a new firm.
