Neutral Third Party to Examine Celsius' Finances

blockchain.news:

A neutral third party is set to examine the finances of Celsius Network, which earlier this year filed for Chapter 11 bankruptcy.

The move was approved by a US bankruptcy judge in the Southern District of New York following a request from the Justice Department, securities regulators, and representatives of creditors.

Crypto lender Celsius has not objected to the examination from a neutral third party.

However, smaller claimants were seeking to actively pay off the company's debts by asking for a trustee instead. The use of an examiner in Chapter 11 bankruptcies is rare.

Earlier, the Committee for Unsecured Creditors (UCC) — a consumer and creditor group — had raised doubts about the cost associated with an examiner, but recently they fixed an agreement with the Justice Department's bankruptcy office, the U.S. Trustee Program, to narrow the scope of the examiner's probe, causing them to change their position.

Additionally, Martin Glenn — the judge presiding over the Celsius case — has left open the possibility of further changing the scope of the third-party examination of the crypto lender's finances. 

The initial move to appoint an examiner was last month by the US Trustee. The case requires a neutral investigator due to «extreme financial irregularities» and «the extensive mistrust of the Debtors' customers,» according to the US Trustee last month.

Meanwhile, the UCC is also conducting its own investigation into Celsius.

The Block reported that the UCC will join a call with state regulatory agencies tomorrow to share the status of their respective investigations, according to counsel Gregory Pesce.

In July, Celsius entered Chapter 11 bankruptcy proceedings after it suspended customer withdrawals, swaps, and transfers