Regulators in two states oppose bankrupt crypto lender Celsius seeking permission to sell its stablecoin holdings.
According to recent court documents, the Vermont Department of Finance and two Texas regulatory agencies are filing objections to Celsius asking the bankruptcy court if it can sell its remaining stablecoins.
Texas agencies say Celsius shouldn’t get the clearance because it hasn’t disclosed how many stablecoins will be sold or how the sales would benefit its creditors.
Additionally, Texas claims that an examiner to review Celsius’s crypto holdings has been hired by the government, and that it would be “inappropriate” for them to sell assets while the valuation is unresolved. .
“The debtors do not disclose in the petition how much stablecoin will be sold, and how the monetization of the stablecoin ultimately benefits the bankruptcy estate and the debtors’ many consumer creditors…
Finally, the United States Trustee is currently in the process of employing an examiner to examine, among other things, debtors’ cryptocurrency holdings. The request to sell some of these cryptocurrency assets while this review is ongoing is inappropriate. »
Vermont files its objection on the grounds that Celsius would have to operate illegally within its borders to sell the stablecoins. The state also claims that Celsius did not specify what it would do with the proceeds from the sales.
“It is not at all clear what the debtors intend to do with the proceeds of these sales, whether the requested relief extends to stablecoin-denominated assets such as personal loans to consumers, and in the extent to which the debtors’ use of the sale proceeds will be monitored by the court.
To the extent that Debtors’ intended activities include offering or selling securities in Vermont or exchanging money, Debtors cannot legally proceed without proper securities registration and/or license as a transmitter of funds.
Celsius, which owns 11 different types of stablecoins worth around $23 million, initially filed for bankruptcy court approval to liquidate its holdings earlier this month. The company said selling the tokens would help fund its operations.
“The Obligors, in the exercise of their reasonable business judgment, believe that selling their stablecoin in accordance with past practice and in the normal course of business is an effective means of generating cash to help fund the Obligors’ operations.”
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