Key takeaways:
- Celsius has objected to a petition by cryptocurrency firm Galaxy Digital asking for nearly $190,000 in fees for holding just $2.67 worth of digital assets belonging to Celsius.
- Celsius claims that only $2.67 worth of cryptocurrency was kept with Galaxy after it acquired a portion of the company from Galaxy in a bankruptcy sale.
Celsius has objected to a petition made by cryptocurrency firm Galaxy Digital that asks for nearly $190,000 in fees for holding just $2.67 worth of digital assets belonging to Celsius.
In a bankruptcy court petition on Thursday, Celsius claims that Galaxy’s services were not necessary costs deserving of priority reimbursement.
The Chapter 11 bankruptcy petition for Celsius was submitted in July. With the use of Galaxy’s technology and a monthly charge, the two businesses created a business arrangement where Celsius could store cryptocurrency.
Celsius claims that only $2.67 worth of cryptocurrency was kept with Galaxy after it acquired a portion of the company from Galaxy in a bankruptcy sale. But Galaxy continued to charge Celsius $30,000 a month or so.
In a motion, Galaxy asked the court to impose reimbursement, arguing that these expenses were required in order to protect Celsius’ assets. Celsius complained, claiming that the small amount of value stored made the costs excessive and unneeded.
Galaxy’s demand for fees of $191,610 has been rejected by Celsius, which has asked the court to do so. According to Celsius, Galaxy was unable to demonstrate that the costs were actual and essential and so entitled to priority reimbursement in the bankruptcy process.
The United States Bankruptcy Court for the Southern District of New York is now hearing arguments regarding the objection.
Voting in favor of a plan to distribute stock through a new company and repay the money to creditors in the Celsius bankruptcy case. The idea still needs to be approved at a hearing scheduled on October 2, despite the nearly unanimous support it has garnered from voters.
On September 15, Core Scientific announced that it had agreed to sell a Bitcoin mining data center to Celsius for $14 million in cash in order to put an end to “all existing litigation.”
