Creditor representatives support plan to appoint examiner in Celsius bankruptcy

Quick Take

  • The Committee of Unsecured Creditors has reached an agreement with the U.S. Trustee on the appointment of an examiner to embattled lender Celsius.
  • Creditors previously expressed concern at the scope, expenses and time costs related to an examiner. 

The Committee of Unsecured Creditors in Celsius's Chapter 11 bankruptcy case has reached an agreement with the Department of Justice on its request to appoint an examiner to the lender. 

If the proposed order approved, a neutral investigator would be appointed to conduct an investigation into Celsius’s storage of crypto holdings, account management for customers, status of its mining business, and taxes—issues that involved parties have continuously asked for clarity on.

Unsecured creditors in the case previously said they had concerns that the broad scope of a proposed third-party investigation could be costly to the estate and prolong the bankruptcy proceedings. Now they say they’ve reached consensus with the Justice Department’s Office of the U.S. Trustee.

"This resolution, if approved by the court, will balance the need for transparency with the risks of significant costs/delay. If the court orders the appointment of an examiner, we will work with that individual to ensure transparency and accountability for account holders," the Unsecured Creditor Committee posted from its official Twitter account. 

If an examiner is assigned, they will prepare and file an investigation report within 60 days of receiving approval of their investigation plan. 


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The U.S. Trustee called for an examiner last month, arguing it was necessary due to a continued lack of sufficient information. That initial motion planned to include a look into allegations of "fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of [the Debtors] of or by current or former management of [the Debtors]." The U.S. Trustee argued an outside examiner could provide visibility into Celsius's business model and balance sheet in addition to fostering public trust.

Yesterday, state securities regulators in Vermont and Texas filed their support for an examiner, saying Celsius' public statements were inconsistent and may have misled investors. The evidence included in the filing suggested Celsius may have been using a Ponzi-like scheme to pay yields. 

A group of borrowers in the case also filed their support for an examiner yesterday, but proposed the appointment of a chapter 11 trustee to mitigate the expenses and time costs of an examiner. 

The issues and order will be discussed at the upcoming Sept. 14 hearing. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to [email protected] or follow her on Twitter for updates @AislinnKeely.