Justice Department seeks to block withdrawal motion in Celsius case

Quick Take

  • The DOJ is attempting to block withdrawals for Celsius customers until the independent examiner completes her investigation.
  • The U.S. Trustee filed an objection to Celsius’ withdrawal motion today.

The representative for the Department of Justice in the Celsius bankruptcy case is looking to block the firm's attempt to reopen withdrawals for certain customers until after an independent investigation is completed.

Celsius filed a motion to return funds to customers in the custody and withhold accounts program at the start of this month. The U.S. Trustee objected to that motion today, saying "the motions are premature and should be denied until after the Examiner Report is filed."

"The facts necessary to evaluate these Motions are the exact facts identified by the Examiner Motion as lacking transparency and that the Examiner is required to investigate and analyze in the Examiner’s Report," the objection argues. "Any distribution or sale at this juncture could inadvertently impact or limit distributions to other creditors in this case."

According to the U.S. Trustee, Celsius is "impulsively" attempting to reopen withdrawals for one group of creditors while the court has yet to gain comprehensive insight into the company's crypto holdings and the relationship between their crypto balance sheet and crypto deposited by creditors. 

"Parties cannot evaluate if the Debtors should be making distributions or sales until it is clear how many creditors the Debtors have, what the Debtors owe, to whom, what the Debtors assets are, and how its crypto assets are held," the objection says.

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