Monday, November 28, 2022

Texas Operators Oppose Celsius’ Stablecoins Sale Plan

In a new development in the Celsius debacle, state regulators in Texas oppose Celsius’ plan to sell stablecoins to fund operations.

According to filings from the Texas State Security Board and the Texas Department of Banking, there is a chance that Celsius could resume operations with the proceeds of the sale. This contravenes state laws as Celsius is yet to register its business in the states.

Interestingly, the regulators’ filing is a response to an earlier request by the crypto lender to sell its stablecoins holdings. Celsius had approached the court in charge of its bankruptcy proceedings to allow it to sell its stablecoins possession. At the time, the lender said it needed the funds worth about $23 million to fund its operations.

As a result of the new development, the court has scheduled a hearing on the potential sale of stablecoin on October 6.

Bankrupt Celsius’ journey so far

Following the heat of the crypto winter, Celsius halted withdrawals sometime in June in a bid to stabilize liquidity. It equally paused its swap and transfer products.  Shortly after, the U.S States including Vermont, Alabama, New Jersey, and Washington amongst others began to investigate the troubled lender. The regulators believe it was in no position to honor its obligations to creditors after the Terra-Luna crash.

Afterward, the embattled lender filed for bankruptcy protection to protect it from aggrieved creditors while it worked on its restructuring. The firm declared $167 million in liquidated cash. It planned to use it for financial needs that arose from its restructuring.

Since it declared bankruptcy, a number of potential buyers have indicated an interest in acquiring the assets of the bankrupt lender. Ripple Labs, the firm behind the popular XRP cryptocurrency is one of the firms that indicated an interest in Celsius’ assets.

Earlier in the week, Alex Mashincsky, the CEO of Celsius Network resigned from his position effective immediately.  According to his resignation letter, he relinquishes his positions in all of the company’s direct and indirect subsidiaries. Chris Ferraro the firm’s Chief Financial Officer (CFO) will now act as its CEO to carry on with its restructuring process.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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