AI Trading

Key Insights:

  • Celsius Network targets EquitiesFirst for a massive $439M asset recovery.
  • 2022’s bear market pushes Celsius into Chapter 11 bankruptcy.
  • Legal battles escalate as the crypto industry watches closely.

Currently navigating bankruptcy, Celsius Network has initiated legal proceedings against EquitiesFirst Holdings to recover assets amounting to $439 million. This development further complicates the ongoing challenges in the crypto lending sector.

History of Debt with EquitiesFirst

Celsius Network’s association with EquitiesFirst Holdings started in 2019. During this period, Celsius sought collateralized loans from the Indianapolis-based private lender. Alex Mashinsky, the former CEO of Celsius, cited a notable absence of institutional lending options for cryptocurrency entities.

AI Trading

However, by July 2021, the relationship faced strains. Celsius attempted to reclaim its collateral, but EquitiesFirst indicated its inability to return the entrusted amount. By then, EquitiesFirst’s debt to Celsius had reached $509 million, an increase from the initial $439 million attributed to over-collateralized loans. From September 2021, EquitiesFirst began repaying the debt, settling $5 million monthly. By July 2022, the outstanding amount stood at $439 million, divided between $361 million in cash and 3,765 Bitcoin.

Challenges for Celsius Network

2022 was a challenging year for Celsius Network. The company faced the repercussions of the crypto bear market, leading to its Chapter 11 bankruptcy protection filing on July 14, 2022. A day before this filing, Alex Mashinky faced arrest. Authorities charged him with misleading Celsius users and alleged financial misconduct involving billions.

Furthermore, the Federal Trade Commission levied a $4.7 billion fine on Celsius, accusing the company of misleading its users. This judgment, however, was temporarily halted to aid Celsius’s bankruptcy proceedings.

Currently, Celsius creditors are considering a settlement proposal. If approved, a consortium named Fahrenheit plans to acquire Celsius’s assets. The subsequent step involves establishing a new company to facilitate the return of funds to Celsius’s creditors.

Legal Proceedings in Progress

Celsius Network filed its complaint against EquitiesFirst Holdings on September 6. Beyond financial recovery, Celsius seeks a declaratory judgment related to asset recovery. Alexander Christy, CEO of EquitiesFirst, is also named as a defendant. Concurrently, Celsius issued a summons to EquitiesFirst, necessitating a response within 35 days.

In conclusion, the crypto industry is observed closely. The outcome of this legal dispute may influence future interactions in the crypto lending space. As events progress, industry stakeholders await further developments with keen interest.

AI Trading produces top quality content for crypto companies. We provide brand exposure for hundreds of companies. All of our clients appreciate our services. If you have any questions you may contact us. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors and the views expressed in them do not reflect the views of this website. Herald Sheets is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.

Tom Blitzer

By Tom Blitzer

Tom Blitzer is an accomplished journalist with years of experience in news reporting and analysis. He has a talent for uncovering the key elements of a story and delivering them in a clear and concise manner. His articles are insightful, informative, and engaging, providing readers with a nuanced understanding of complex issues. Tom's dedication to his craft and commitment to accuracy have made him a respected voice in the world of journalism.