Kingdom

Celsius

United

Celsius is seeking to consolidate two of its entities located in the United Kingdom and the United States. The bankrupt crypto lender faces charges of poor record-keeping of its affiliate companies, making it almost impossible to &#8220;fully reconstruct&#8221; intercompany claims.
The distinction between Celsius&#8217; UK and US operations was deemed to be a &#8220;sham&#8221; by the creditors.
<ul>
<li>In mid-2021, the company&#8217;s Celsius Network Limited arm purported to migrate the customer-facing business on the Celsius platform from CNL to Limited Liability Company (LLC), a newly-created shell firm incorporated in Delaware.</li>
<li>CNL was accused of transferring billions of dollars worth of liabilities to LLC, while the former retained nearly all of the assets associated with those obligations.</li>
<li>The assets were claimed to have been used to deploy in &#8220;money-making investments,&#8221; despite warnings from UK regulatory authority Financial Conduct Authority (FCA) to cease all retail operations in the country.</li>
<li>The court filing on May 1st <a href="https://cases.stretto.com/public/x191/11749/PLEADINGS/1174905022380000000050.pdf" target="_blank" rel="noopener" data-wpel-link="external">stated</a> that the &#8220;migration resulted in intercompany chaos.&#8221; It also revealed that no formal documentation of the CNL-LLC intercompany relationship was completed for several months, and even when it was, it remained ambiguous what transactions the agreements effectuated.</li>
<li>It further argued that the two entities should be treated as one as such move is an &#8220;appropriate remedy.&#8221;</li>
<li>The books and records offered very little clarity as Celsius routinely failed to record intercompany coin transfers. It is estimated that thousands of entries are missing from the records.</li>
<li>The debtors now working to reconcile these records for months but is yet to reach a conclusion. However, full accounting on a transaction-by-transaction basis may never be possible, the document revealed.</li>
<li>Earlier this year, Celsius <a href="https://cryptopotato.com/263-days-later-some-celsius-customers-can-withdraw-their-funds/" target="_blank" rel="noopener" data-wpel-link="internal">announced</a> the reopening of Distributable Assets in certain Custody Accounts, which allowed eligible customers to withdraw funds for the first time since the lender halted its services in June 2022.</li>
</ul>
The post <a href="https://cryptopotato.com/celsius-calls-for-consolidating-us-and-uk-entities-amidst-poor-record-keeping-allegations/" rel="nofollow">Celsius Calls for Consolidating US and UK Entities Amidst Poor Record-Keeping Allegations</a> appeared first on <a href="https://cryptopotato.com/" rel="nofollow">CryptoPotato</a>.

Celsius Calls for Consolidating US and UK Entities Amidst Poor Record-Keeping Allegations

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