Prime Trust dispute settled, fee examiner appointed at Celsius hearing

Quick Take

  • The bankruptcy court began to look at a possible auction process today as Celsius submitted proposed bidding procedures, with an eye to closing by the end of the year under the current proposal.
  • The court also appointed a fee examiner to look at the costs the state is incurring by retaining professionals.
  • Prime Trust settled its legal dispute with Celsius by agreeing to send nearly $17 million in crypto that Celsius says it was owed.

Parties in the Celsius bankruptcy proceedings are beginning to hash out a process for a possible auction of the company's assets.

Those assets remain in flux as crypto custodian Prime Trust agreed to return about $17 million in crypto to the embattled lender at today's hearing.

Additionally, the court also agreed to appoint a fee examiner to take a look at the rising costs of the bankruptcy process. 

Chief Bankruptcy Judge in the Southern District of New York Martin Glenn heard arguments regarding the timing of proposed bidding procedures for assets held by the mining business and retail platform. Lawyers for Celsius had revised its timeline to accommodate questions surrounding which assets constitute custody as opposed to other products. It's now aiming to wrap up any possible sale process before the end of the year. 

Celsius may see additional funds through the resolution of its dispute with custodian Prime Trust. Prime Trust previously held nearly $120 million in assets for Celsius and returned the majority of those funds when the relationship dissolved, but Celsius sued for the return of the final $17 million that it claimed Prime Trust failed to return. At today's hearing, Prime Trust said it would return the funds to a Celsius wallet pending court approval. 

Celsius has yet to file a standalone plan in the bankruptcy process, which would come before an auction. The independent examiner appointed to the case is still at the start of the investigation process.


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The findings of that investigation could affect the disbursement of assets to creditors and reveal more about the state of the business and its regulatory dealings, which would affect an auction process.  

Part of the concern around setting the dates for a possible auction has to do with preserving the remaining funds of the estate. Bankruptcy processes are costly and can cut into already scarce funds that are often meant to end up in the hands of creditors. This was the main concern raised before the court appointed the independent examiner and led to a narrowed scope of the intended investigation. 

Now, the court is appointing another examiner to review the monthly fee statements filed by retained professionals throughout the bankruptcy process. Judge Christopher Sontchi will take up the role. He previously served as a bankruptcy judge in the District of Delaware before retiring from the seat to focus on mediations and arbitrations as well as serving as an International Judge of the Singapore International Commercial Court on insolvency matters.

Celsius entered the Chapter 11 process in July. The next hearing in the case is set for Nov. 1. 

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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 or follow her on Twitter for updates @AislinnKeely.