Lenders’ List: Celsius Network Forced To Disclose Names Of Creditors

The bankruptcy court handling the ongoing Chapter 11 process of Celsius Network thumbed down the firm’s request to seal the identities of its creditors.

When a company files for bankruptcy in the United States, it must submit a list of creditor names and addresses known as a creditor matrix. This is how the court sends out notices and claims information.

Celsius filed a motion to redact the names, home addresses, and email addresses of its creditors, arguing that these would give competitors a “significant competitive advantage” if disclosed publicly. The firm also argued that these are personal identifiable information, as well as probable violations of data protection laws in other countries for its non-US citizen creditors.

However, the court disagrees.

“Ultimately, this Court is unconvinced that the names alone without any of the other identifying information constitutes commercial information. In this case, the customer names alone, without their addresses and emails, would not unequivocally identify people,” the judge wrote in his decision.

The court, however, agreed to grant the motion to redact the home addresses and email addresses of the individuals involved.

The judge added that disclosing the names and the claim amounts “is important to the fairness and public perception of the bankruptcy process.”

Celsius then had to comply. The firm made available schedules of assets and liabilities as well as statements of financial affairs (SOFA) for each of its eight subsidiaries. The schedules include the identities and transactions of every Celsius user on the platform for the previous 90 days.

Judge Martin Glenn also ordered the newly-appointed examiner Shoba Pillay to prepare an interim report on Celsius’ financial management and client account handling. The report will have an impact on the court’s decisions on custodial accounts and preference claims.

A preference claim, sometimes known as a “clawback,” is filed by the bankruptcy trustee against creditors who were paid within a particular time period before the bankruptcy filing. Creditors have 90 days, while insiders have a year.

Due to the filing, it was revealed that some Celsius top executives–including former CEO Alex Mashinsky–withdrew at least US$30 million in cryptocurrency in the month preceding the platform’s suspension of consumer withdrawals. The ex-chief alone was figured to have withdrawn US$10 million.

READ: The Mashinsky Method: Understanding The Degree Of Celsius Network’s CEO’s Complicity In The Firm’s Bankruptcy

The court’s next hearing is set on October 20.

Information for this briefing was found via David Gerard and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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