US Department of Justice spokesman opposes partial asset recovery for Celsius customers

A spokesman for the agency called this decision “premature,” he believes that it is necessary to wait for the end of the investigation

02.10.2022 - 07:00

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What’s new? William Harrington, the US Department of Justice’s Trustee in the bankruptcy case of the Celsius crypto lending platform, has opposed a plan to partially restore withdrawals for its customers. In early September, Celsius filed a petition to return some of its assets to creditors of about $50 million. Harrington called the decision “premature” and said it should wait until a full independent investigation is completed.

Petition by the US Department of Justice

What else did Harrington add? The Justice Department spokesman added that the firm’s request would “impulsively distribute” funds without a full understanding of the company’s cryptocurrency reserves and the transactions themselves. Also, in his opinion, it is impossible to determine the exact number of creditors to whom the funds should be paid.

“The Motions are premature and should be denied until after the Examiner Report is filed. […] Any distribution or sale at this juncture could inadvertently impact or limit distributions to other creditors in this case,” the Department of Justice’s Trustee wrote.

Harrington also spoke out against Celsius selling its stablecoin holdings. The bankrupt crypto broker submitted a corresponding request to the court on September 15.

Celsius situation. In June, Celsius froze customer funds, citing unfavorable market conditions. On July 13, it filed for bankruptcy. Celsius’ lawyers said that most of the user funds on the platform are at the company’s disposal.

In September, Celsius CEO Alex Mashinsky unveiled a new plan to restructure Celsius into a custodial platform. On September 27, Mashinsky tendered his resignation.

To find out what caused the bankruptcy of Celsius, one of the largest crypto lenders, see GetBlock Magazine’s article.

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