The crypto company the sec is investigating is Celsius but in this case it seems to have been on to something because just a few months after the mainstream media got word that the sec was poking around the crypto platform Celsius filed for bankruptcy.
This actually came as something of a surprise to Celsius users given that Celsius had been paying off hundreds of millions of dollars of defi loans in the weeks between when it had paused withdrawals to the day that it had declared its bankruptcy. However we now know that Celsius was rushing to reclaim its crypto from these protocols so that it could pay off other debts on time – something which it clearly didn’t manage to do. Celsius ended up somewhere between 1. 2 and 1. 8 billion dollars in the hole depending on how you value the sell token.
It looked like Celsius’s own disorganization and desperation for higher yields is what ultimately led to its downfall. Something that has now been confirmed by Celsius’s former employees what everyone is wondering now is what comes next and the first steps towards an answer to that question were taken last Monday when the first hearing of Celsius’s bankruptcy case took place. Those of you who watched it will know that it was about as much of a mess as Celsius was behind the scenes and that’s simply because the first day of deliberations was essentially Celsius’s side of the story. Celsius more or less admitted that they had messed up and proposed to use their crypto mining arm to progressively repay their users a plan which has been met with much scrutiny from mining experts who have emphasized that mining is a capital-intensive operation that needs constant cash flow. As far as I understand the next hearing will focus on what Celsius’s creditors aka users want to see from the company.
A committee consisting of seven to nine creditors will be put together and word on the street is that these will probably be the people who have the most at stake i. E the most money deposited. This committee will then decide on Celsius’s recovery plan or propose their own and it looks like the Celsius community wants to go the latter route with some high-profile users wanting to restart the company without its now infamous ceo Alex Mazzinski. This is starting to sound like what happened in the aftermath of terrace collapse. Now you’d be forgiven for thinking that the reason why some countries are cracking down on crypto is because of entities like Terra and Celsius.
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