Celsius Plans to Merge UK and US Entities After Distinction is Questioned

Legal documents filed in court are calling for a solution to a problem that could be important for customers and investors of Celsius, a cryptocurrency lending platform.

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Crypto lending platform Celsius wants to merge its U.K. and U.S. entities. However, court filings claim that the difference between the two companies was not real, and merging them might affect the recovery of Celsius’s customers and Series B investors.

Celsius, a cryptocurrency lender, wants to merge its UK and US entities, while court documents accuse the company of pretending the two entities were different. The company has been accused of having inadequate record-keeping in its corporate structure, and now its customers and Series B investors are in a legal battle.

In 2021, Celsius created a Limited Liability Company in Delaware and tried to move its assets using a series of financial transactions. Earlier, the U.K. Financial Conduct Authority had warned its Celsius Network Limited arm to stop operating in the country.

Celsius said in a filing on May 1 that there was a lot of confusion between the companies when they were combined, and they did not keep good records. It has become difficult to separate the business of each entity from one another.

According to court documents, regular customers of Celsius were not informed of the consequences of the transfer of assets between the U.K. and U.S. entities, while Series B investors knew about the poor record-keeping. The filing suggests that the two entities should be treated as a single entity in the bankruptcy proceedings.

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The creditors of Celsius filed documents stating that the firm’s reorganization was fake and dishonest, and that the billions of dollars transferred between the two entities were fraudulent. As a result, the court in New York, which is trying to recover funds for the creditors, should ignore them.

Similar to FTX, which was described as a poorly managed and fake digital village, Celsius is also facing accusations of being misleading in its corporate structure.

 

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