The bankrupt cryptocurrency lender, Celsius Network, has taken legal action against EquitiesFirst Holdings in a bid to recover assets, as stated in a bankruptcy court document filed on Wednesday.
EquitiesFirst is a private lending platform that owed Celsius approximately $439 million in cash and bitcoin as of July 2022. Celsius had initially obtained collateralized loans from EquitiesFirst in 2019 but was unable to return the collateral in 2021. The recent legal filing names both the company and its CEO, Alexander Christy, as defendants.
The rest of the document related to this case has been kept confidential or “under seal.”
The docket entry on the bankruptcy page reads, “Complaint against Defendants Equities First Holdings, LLC, Alexander Christy (Adversary Complaint Filed Under Seal).” This sealed filing is said to be seeking injunctive relief and a declaratory judgment, with a focus on the “recovery of money/property.”
Celsius Network faced financial difficulties and filed for Chapter 11 bankruptcy protection in July 2022, becoming one of the early casualties of the crypto market downturn.
The co-founder and former CEO, Alex Mashinsky, was arrested earlier this year and is now facing multiple charges, including securities fraud and manipulation related to the company’s CEL token.
Creditors are currently voting on whether to sell assets to a consortium called Fahrenheit, the winning bidder, as part of the bankruptcy proceedings. This could potentially allow them to regain access to some of the assets they have on the Celsius Network platform.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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