The Department of Justice Objects Celsius' Proposal to Sell Its Stablecoins

The Department of Justice Objects Celsius' Proposal to Sell Its Stablecoins

Celsius' plans to sell stablecoins and reopen withdrawals are objected by multiple institutions.

The Department of Justice (DOJ), the United States federal executive department responsible for federal law enforcement and administration of justice, is objecting Celsius motion to reopen withdrawals and sell its stablecoins.

According to the objection filed by United States Trustee for the DOJ, William Harrington, Celsius' plans to reopen withdrawals and sell stablecoins are “premature.”

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Harrington's filing added that before allowing any kind of withdrawals from Celsius accounts, law institutions must have full transparency about firms' financials. He also noted that withdrawals could be reopened after the independent investigator submits their findings.

The Motions are premature and should be denied until after the Examiner Report is filed. First, the Withdrawal Motion seeks to impulsively distribute funds to one group of creditors in advance of a fulsome understanding of the Debtors’ cryptocurrency holdings.

The objection also noted that the proposal to sell its current and future stablecoins does not outline “what impact such a distribution or sale would have” on business and the whole market in general.

The objection noted that on September 29th, the United States Trustee had appointed Shoba Pillay to provide her insights as an independent examiner on Celsius. The DOJ expects Pillay to share a clear outline of Celsius assets and liabilities.

The Department of Justice is not the only one objecting to Celsius proposals. On September  29th, the Texas Department of Banking, the Texas State Securities Board, and the Vermont Department of Financial Regulation filed an objection for Celsius to sell its stablecoins. In separate filings, all institutions noted that there is a risk that the company will use the capital gained from selling stablecoins to resume its operations and violate state laws.

It is worth noting that, on September 15th, Celsius filed a request to the United States Bankruptcy Court for the Southern District of New York to sell all of its current and future stablecoin holdings. On September 1st, Celsius filed a motion to allow withdrawals for users having Custody or Withhold accounts.

The objections will be discussed in the hearing on October 6th.

Gile K. - Crypto Analyst

by Gile K. - Crypto Analyst, BitDegree


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