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Celsius. A New Bankruptcy Report and Rescue Bitcoins

The latest report on the bankruptcy of Celsius says that the debt of Celsius is $2.85 billion, although previously it was said to be about…

Judge Martin Glenn. Source: Freedom Film LLC
judge Martin Glenn. Source: Freedom Film LLC

The latest report on the bankruptcy of Celsius says that the debt of Celsius is $2.85 billion, although previously it was said to be about $1.2 billion. During the last court session, the possibility of selling bitcoins to cover expenses was actively discussed.

As we wrote earlier, Celsius experienced problems after the collapse of Terra and stopped withdrawing funds from the platform. Then, for the first time, many in the network started talking about the fact that the company was facing bankruptcy, which is evident today. And of course, this process is not easy going for the company.

On July 13, Celsius did submit a bankruptcy petition to the New York court and the debt was estimated at $1.2 billion. However, a new report dated August 14 showed that the amount is significantly more, namely $2.85 billion.

This can become a problem for Celsius for two reasons simultaneously. Firstly, the community may assume that the company’s management deliberately concealed the current state of affairs, which will negatively affect the company’s reputation. Secondly, the information from the new report may cause the company to be accused of providing false information to the court.

However, the company continues to struggle and is making efforts to survive. On August 16, a second hearing was held in court, during which Celsius received permission to sell bitcoins mined by the company. It should be noted that during the first hearing, a block was imposed on the sale of bitcoins by the company, since then the creditors’ committee assumed that Celsius would be able to use bitcoin to continue trading or issue new loans, which would lead to a profit.

However, a new petition from Celsius convinced the court that bitcoin will be used to pay for operating expenses (payment of taxes, payment of lawyers’ activities). Despite the fact that the petition was granted, Judge Martin Glenn expressed concern that this was a risky step for Celsius.

“At the bottom, I think this is a business judgment decision,” — the judge clarified.

It seems that Celsius is not discouraged and is quite happy with the way the trial is proceeding. They share all developments with their community on Twitter.

Another interesting development in this court case was that Ripple Labs asked to be included in the list of participants in the Celsius bankruptcy trial. This was also approved by the court.

“We are interested in learning about Celsius and its assets, and whether any could be relevant to our business,” — a company representative told the news agency Reuters.

The network immediately suggested that Ripple wants to buy Celsius or merge companies, but representatives of the companies have not commented on the situation and haven’t disclosed any information about possible negotiations.

The next hearing on the Celsius case will be held on September 1. We will observe how the situation with the bankruptcy of Celsius develops and whether the permission to sell bitcoins will help them improve their situation, and we will also be monitoring what role Ripple might play in the fate of the company.