Latest News: DOJ opposes Celsius’ plans to resume operations.

The Department of Justice (DOJ) has filed an objection to Celsius’ motion to reopen withdrawals from some of its customers and sell its stablecoin holdings.

What are its reasons?

The DOJ claims that the state of Celsius’ finances lacks transparency and that they prefer to wait for the independent examiner’s report before making a decision as big and heavy as this one.

The Texas Department of Banking and the Vermont Department of Financial Regulation, also object to Celsius selling its stablecoin holdings, claiming there is a risk that the company could use the capital to return to illegal operations in violation of state laws.

Where did the objection occur?

On September 30 in a filing with the Bankruptcy Court in Southern New York, William Harrjiington a DOJ trustee gave the objection to Celsius opening withdrawals to its “custody” and “holding” clients, citing a lack of transparency about the firm’s finances.

In his arguments he commented that such withdrawals should not be opened until the independent examiner’s report:

“The Motions are premature and should be denied until the Examiner’s Report is filed. First, the Withdrawal Motion seeks to impulsively distribute funds to a group of creditors before a full understanding of the Debtors’ cryptocurrency holdings.”

The DOJ has also objected to a potential sale of stablecoins, highlighting “what impact such a distribution or sale would have” on the business going forward “Second, the stablecoin motion seeks to liquidate stablecoins held by the Debtors without providing information about ownership, segregation, or the impact of such a sale on subsequent distributions to creditors who may have stablecoins on deposit with the Debtors”

Who is the examiner for the case?

The U.S. trustee appointed Shoba Pillay as an examiner on September 29, and the New York bankruptcy court approved the appointment the same day.

This examiner will have two months to file the report on Celsius, which is expected to provide a clear breakdown of its assets and liabilities.

Conclusion:

Hopefully, this will be a wake-up call for all cryptocurrency companies that operate in a suspicious manner or lack transparency with the customers of their movements.