Celsius Network's Legal Action Against EquitiesFirst for Asset Recovery
Celsius Network, a prominent player in the cryptocurrency lending sphere, recently filed for bankruptcy and has now escalated its efforts by lodging an "adversary complaint" against EquitiesFirst Holdings. This strategic move is aimed at recovering substantial assets that Celsius claims are rightfully owed to them. According to court records linked to the ongoing bankruptcy case, as of July 2022, EquitiesFirst Holdings, a private lending platform, was indebted to Celsius to the tune of approximately $439 million. This sum includes both cash and bitcoin holdings.
The origin of this legal dispute dates back to 2019 when Celsius initially entered into collateralized loan agreements with EquitiesFirst. However, tensions flared when Celsius alleged that the collateral provided was not returned in 2021, a situation that was previously highlighted by Bitsday. In response to these allegations, Celsius has taken EquitiesFirst Holdings and its CEO, Alexander Christy, to court. While the general nature of the complaint is known, specific details within the document remain confidential.
The docket entry on the bankruptcy page, identified as "Complaint against Defendants Equities First Holdings, LLC, Alexander Christy (Adversary Complaint Filed Under Seal)," indicates that the filing is pursuing injunctive relief and a declaratory judgment. These legal measures are intimately tied to the broader objective of recovering the funds and assets at the heart of the dispute.
The unfolding of this legal drama follows Celsius' tumultuous journey through the cryptocurrency market's ups and downs over the past year. As the market witnessed a sharp decline, Celsius found itself among the early casualties. This led the company to seek refuge under Chapter 11 bankruptcy protection in July 2022. Furthermore, co-founder and former CEO, Alex Mashinsky, faced severe legal ramifications, including charges of securities fraud and manipulation, specifically linked to the company's native CEL token.
In the present phase, creditors are actively participating in a crucial decision-making process. They are collectively deciding whether to sell off assets to the winning consortium, Fahrenheit. This decision, if approved, could potentially provide creditors with a vital pathway to recovering a portion of the assets that have been entangled within the platform's complex financial landscape.