Regulators from two states are objecting to bankrupt crypto lender Celsius seeking permission to sell their stablecoin holdings.
According to recent court documents, the Vermont Department of Finance alongside two regulatory agencies from Texas are filing objections to Celsius asking the bankruptcy court if it can sell its remaining stablecoins.
The Texas agencies say that Celsius should not be granted permission because they have not disclosed how many stablecoins will be sold as well as how the sales would benefit its creditors.
Furthermore, Texas says that an examiner to review Celsius’ crypto holdings has been hired by the government, and it would be “inappropriate” for them to sell assets while the assessment is unresolved.
“The debtors fail to disclose in the motion how much stablecoin will be sold, and how the monetization of the stablecoin ultimately benefits the bankruptcy estate and the many consumer creditors of the debtors…
Finally, the United States Trustee is currently in the process of employing an examiner to review, inter alia, the cryptocurrency holdings of the debtors. The request to sell certain of these cryptocurrency assets while this examination is pending is inappropriate.”
Vermont is filing its objection on the grounds that Celsius would have to illegally operate within its borders to sell the stablecoins. The state also says Celsius has not made it clear what it would do with the proceeds of the sales.
“It is not at all clear what the debtors intend to do with the proceeds of any such sales, whether the relief requested extends to Stablecoin-denominated assets such as retail loans to consumers, and the degree to which debtors’ use of sale proceeds will be supervised by the Court.
To the extent debtors’ planned activities include the offer or sale of securities in Vermont or the exchange of money, debtors cannot proceed lawfully without appropriate securities registration and/or licensure as a money transmitter.”
Celsius, which has 11 different types of stablecoins valued at around $23 million, initially asked the bankruptcy court for permission to liquidate its holdings earlier this month. The firm said selling the tokens would help fund its operations.
“The debtors, in an exercise of their reasonable business judgment, believe that the sale of their stablecoin consistent with past practice and in the ordinary course of business is an efficient way to generate liquidity to help fund the debtors’ operations.”
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