The court filing said that the Series B investors in Celsius were “well aware” that the company was not keeping good records.
Celsius wants to merge two of its businesses in the United Kingdom and the United States. People say that the partner companies of the bankrupt crypto lender didn’t keep good records, which makes it almost impossible to “fully reconstruct” intercompany claims.
The difference between how Celsius did business in the UK and the US was called a “sham” by the company’s creditors.
By mid-2021, the company’s Celsius Network Limited arm was supposed to move the customer-facing business on the Celsius platform from CNL to Limited Liability Company (LLC), a newly created shell company based in Delaware.
CNL was accused of giving LLC liabilities worth billions of dollars while keeping almost all of the assets that went along with those liabilities.
The funds were said to have been used to make “money-making investments,” even though the UK’s Financial Conduct Authority (FCA) had warned them to stop all retail operations in the country.
The May 1 court document said that the “migration led to chaos between companies.” It also showed that there wasn’t any official paperwork about the connection between CNL and LLC for several months, and even when there was, it wasn’t clear what the agreements were for.
It also said that the two groups should be treated as one because that would be a “appropriate remedy.” The books and records were not very clear because Celsius often forgot to record coin changes between companies. It is thought that the records are missing tens of thousands of entries.
The debtors have been working for months to match up these records, but they still haven’t reached a decision. The paper showed, though, that a full accounting of each transaction may never be possible.
In January of this year, Celsius announced that Distributable Assets in certain Custody Accounts would be reopened. This meant that customers who were qualified could withdraw funds for the first time since the lender stopped doing business in June 2022.
