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Failed Crypto Lender Celsius Attempts to Recoup Assets From EquitiesFirst Holdings

The embattled crypto lending company, Celsius Network, which declared bankruptcy in July 2022, has lodged a formal complaint against the private lending entity, EquitiesFirst, in a bid to retrieve assets.

This complaint was recorded in a confidential bankruptcy document on September 6, with the intent to secure an injunction and a declarative judgment pertaining to the “reclamation of funds/property,” as noted in the bankruptcy record.

Earlier in July, Celsius’s co-founder and ex-CEO, Alex Mashinsky, was taken into custody on charges of fraud. The U.S. attorney’s office in Manhattan reported that Mashinsky faced seven criminal charges, encompassing securities, commodities, and wire fraud.

On September 5, a court document mandated a freeze on Mashinsky’s assets amidst the ongoing criminal investigation. According to the report, Mashinsky seems to have lost access to funds held in various banks, including Goldman Sachs, First Republic Securities, Merrill Lynch, SoFi Bank, and SoFi Securities.

Simultaneously with the adversary complaint, Celsius issued a distinct summons to EquitiesFirst, requesting them to provide a response or take action regarding the complaint within a 35-day period.

EquitiesFirst Owes $439 Million to Celsius

In 2022, the Financial Times disclosed that the digital asset lending company, Celsius Network, was owed a staggering $439 million by EquitiesFirst. This amount represents a considerable portion of Celsius’s assets, upon which countless customers are depending to recover a part of their lost investments.

During that period, EquitiesFirst responded, saying it was reimbursing Celsius at a rate of $5 million monthly in both cash and Bitcoin (BTC). These debt specifics came to light during Celsius’s bankruptcy declaration in July 2022, where the firm unveiled the state of its financial liabilities.

Separately, Celsius Network’s creditors are deliberating on an alternative plan to emerge from bankruptcy, which involves selling assets to the Fahrenheit consortium as a component of the ongoing bankruptcy process. If this plan gains approval, disclosures indicate that creditors could potentially recover between 67% and 85% of their investments.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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