"the volume and level of inquiries of the debtors by governmental authorities are crucial," the counsel for the creditors conceded. In addition to the investigations being conducted by the federal government, Celsius is currently the focus of enforcement actions or investigations in at least 40 states. Additionally, some state agencies are conducting their own investigations into the cryptocurrency lending organization. The Texas Securities Board is one example of such a state regulator, and on September 7, it released an official statement regarding the matter.

An Insolvent Cryptocurrency Company

When Celsius Network began rewarding users with interest on their cryptocurrency deposits, it quickly rose to prominence in the cryptocurrency market. However, despite the fact that many participants in the cryptocurrency industry viewed it as a highly lucrative venture, the platform was unable to survive the bear market that began at the beginning of the year.

The decision made by Celsius in June to temporarily halt customer withdrawals from its platform was the first indication that there was an issue, and the company later stated that it was because of the prevailing market volatility. However, the following month, the company submitted a petition for bankruptcy in the state of New York. Members of the special committee of the company's Board of Directors later defended the withdrawal suspension that was initially implemented.

"If the temporary suspension had not been put in place, consumers who had taken appropriate action in a timely manner would have had their funds in full while other users would have been required to wait. They won't be able to get their money back until Celsius Network realizes a profit from its investment in an illiquid or long-term asset, according to a statement released by the board of directors. Because of this recent change, customers who have already deposited money into the platform will now be considered unsecured creditors of the cryptocurrency lending company.

In the United States, the Commodity Futures Trading Commission (CFTC), the Federal Trade Commission (FTC), and the Securities and Exchange Commission (SEC) have all inquired about the cryptocurrency loan company prior to this most recent inquiry (SEC). In addition, the operation of Celsius Network was halted by a federal grand jury in the district court for the state of New York.

Because of this, other cryptocurrency loan organizations have remained under the watchful eye of federal officials in the United States for some time. At the beginning of this year, the Securities and Exchange Commission (SEC) conducted an investigation into Voyager Digital, Gemini Trust, and Celsius Network. However, the regulatory body did not bring any charges against the cryptocurrency lending businesses.

The present bear season in the cryptocurrency market, a bearishness that has refused to abate since the beginning of the year, is one of the contributing factors that led to the current bankruptcy of Celsius Network. On the other hand, a surge in the value of cryptocurrencies may be viewed as a favorable development for the cryptocurrency lending organization.