According to the court-appointed examiner, Celsius was bankrupt from the beginning.

The defunct cryptocurrency lending platform Celsius Network supposedly defrauded customers ever since it was founded as a general populace company in the United States, which is what it purportedly did in order to avoid regulatory oversight in the United Kingdom, according to a study by a court-appointed assessor for its bankruptcy process.

In accordance with the insolvency report by the U.S. examiner, which was published in a Twitter thread by Frances Coppola, a speaker and author on economics, finance, and monetary policy, on February 1, Celsius U.S. “on a stand-alone basis has been insolvent since inception.”

The study also revealed that Celsius U.S. was established in August 2021, following the Financial Conduct Authority (FCA) of the United Kingdom's rejection of Celsius Network U.K. instructed it to stop offering to retail customers in the nation without a permit.

Complex Connections

The inspector also brought up the two companies' intercompany accounting, which Coppola described as “convoluted to say the least, and contains odd ”loans“ and stock transfers somewhat akin to those found in the Celsius-AMV (Equities First) arrangement.”

The analyst outlined how Celsius U.S. was developed as a workaround for the U.K. She continued that she didn't believe “they ever had the faintest intention of forming a freestanding US corporation” because internal accounting never distinguished between the two entities, instead viewing them on a consolidated basis. The auditor's report's above table, which Coppola provided, states that “major portions of Celsius's business, including its Treasury (and all of its retained CEL coins), its mining operation, and GK8 remained with the U.K. a thing,” she insisted.

No accounts have been filed in the last two years.

Additionally, Celsius' U.K. On the website of Companies House, the executive agency supported by the Department for Business, Energy & Industrial Strategy that records data about businesses in the U.K., branch indicated that no accounts had been submitted since December 2020. and offers it to the general public. As it happens, Celsius Network U.K.'s Companies House website. Assuming that it was expected to submit its 2021 full-year accounts by December 31, 2022, as Coppola noted, shows that its accounts were noticeably past due.

A strategy by Celsius to emerge from insolvency by re - branding as a publicly listed recovery corporation, which also means providing lenders with locked assets above a specific threshold a token named Asset Share Token (AST) mirroring the worth of their assets, was met with scam accusations from the crypto world.

Notably, Finbold noted on regulators' accusations against Celsius's execs in September 2022, alleging that they misled shareholders before the well-publicized implosion and engaged in dubious business practices, including the wife of former Celsius CEO Alex Manshinsky, who supposedly cashed out $2 million in cryptocurrency prior to the bankruptcy declaration.

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