Celsius Network, a bankrupt crypto lender, is attempting to consolidate its UK and US entities. The company is facing accusations of poor record-keeping of its affiliate companies which makes it difficult to reconcile intercompany claims.
Moving Customer-Facing Business
Earlier this year, Celsius Network Limited attempted to move the customer-facing business onto a Limited Liability Company (LLC) incorporated in Delaware. This move was criticized after CNL was accused of transferring liabilities worth billions of dollars to LLC. Although CNL retained most of the assets associated with those obligations and used them for “money-making investments,” and despite warnings from the UK regulatory authority, Financial Conduct Authority to stop all retail operations in the country.
The Court Filings
The court filing dated May 1st revealed that the migration resulted in chaos between the two entities. The documents suggest that no formal agreement was reached on the intercompany relationship between CNL and LLC for several months. Even after formal documentation was completed, it remained unclear what effect the agreements would have on the transactions between the two entities.
Books and Records
Celsius routinely failed to record intercompany coin transfers leading to thousands of missing entries. Debtors have been attempting to reconcile these records for months and have not yet reached a conclusion. The document reveals that while a full accounting of the transactions may never be possible, work is ongoing to complete it.
Reopening of Distributable Assets
Earlier this year, Celsius announced the reopening of Distributable Assets in certain Custody Accounts, allowing eligible customers to withdraw funds for the first time since the lender halted its services in June 2022.