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Celsius Networks, a crypto lending company that froze withdrawals in June and has been going through Chapter 11 bankruptcy since July, asked the United States Bankruptcy Court for the Southern District of New York for permission to sell its stablecoin holdings. This should help the company make money so it can "fund the operations of the Debtors."
On Thursday, the Celsius's lawyers from the Kirkland & Ellis law firm filed a notice. On Oct. 6, the court will hold a hearing to decide whether or not to accept the motion.
According to the filing, the company currently has stablecoins that are worth the same as $23 million. If these funds were sold, they would be used to keep Celsius running. The filing refers to section 363 of the Bankruptcy Code and says:
"Section 363 of the Bankruptcy Code is meant to find a middle ground between letting a business keep running without too much court or creditor oversight and keeping secured creditors and others from getting rid of the estate's assets.
Celsius recently filed a motion promising to give customers some of their money back. But it would only apply to Custody and Withold Accounts and assets in custody with a value of $7,575 or less. Some people in the industry didn't like the decision, because it meant that only $50 million of the $210 million could be given out.
As of August 31, an ad hoc group of 64 custodial account holders filed a complaint to get their assets back. This is adding to the pressure on Celsius. The plaintiffs said that Celsius has "not honored any withdrawals from any programs," including custody services.
The complaint says that this goes against the "plain language of the debtors' terms of use," which say that the user always owns the assets in custody.
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