Examiner: Celsius' accounting and operational controls were 'insufficient'

blockchain.news:

In the bankruptcy case involving crypto lender Celsius, the independent examiner claims that the company did not establish «adequate» accounting and operational controls in its handling of client cash. These allegations are based on the fact that the company failed to establish «adequate» accounting and operational controls. The examiner made these accusations in their report.

In an initial report that was made public on November 19 by the court that assigned Examiner Shoba Pillay the task of looking into the bitcoin loan site, Examiner Shoba Pillay brought up several critical issues concerning the site that is no longer in operation.

One of the most shocking admissions made in Pillay's report was the fact that Celsius' Custody programme was initiated «without proper accounting and operational controls or technological infrastructure.» This was one of the most important discoveries made in the investigation. Because of this, the corporation was able to make up for shortages in its Custody wallet with monies from its other assets.

When the Custody programme was launched on April 15, users of the Celsius platform were given the ability to transfer coins to and from one another, swap coins, and utilise coins as collateral for loans.

Because the client's wallets were jumbled up, it is now difficult to establish which assets belonged to the customer at the time that the consumer's bankruptcy was filed. This is because the wallets were mixed together.

The preliminary analysis has also provided light on what ultimately pushed the lending platform to suspend withdrawals on June 12th, and the reasons that decision are described in the paper. This decision was made because of the findings of the investigation.

According to Pillay,