After a number of objections had been filed against the sale on September 29 by a number of securities regulators, the group of creditors ultimately decided to submit the written protest against the sale.

Securities regulators object

On September 15, the now-defunct cryptocurrency lender Celsius submitted a motion to the bankruptcy court in which it requested permission to sell its stablecoins. The total value of these stablecoins was approximately $23 million.

The purpose of the legal filing was to gain access to their stablecoin stash after it was discovered that a recording of an all-hands meeting had been stolen. The recording revealed that the bankrupt company was attempting to introduce a plan for its revival.

On the 15th of September, two weeks after the company had submitted the request for access to its stablecoin cache, state securities officials from Texas and Vermont filed objections against the move.

The request that Celsius Network made regarding its stablecoins was deemed to be "inappropriate" by the Texas State Securities Board (TSSB).

The objection brought forward by the TSSB stated that the motion brought forward by the debtors did not disclose exactly how many stablecoins they intended to sell or how the bankruptcy estate and its creditors would benefit from the monetization of the stablecoins.

Creditors have an objection

On the same day, October 25th, 2022, another objection was submitted by the official committee representing the company's unsecured creditors. In their motion, the official committee stated that the stablecoin request should not be approved.

The committee claims that the ownership of these stablecoins is in question due to the fact that there are some creditors who are of the opinion that the customers of the lender are the rightful owners of these coins.

However, in accordance with the official "Terms of Service" of the cryptocurrency lender, it is not clarified how the digital assets will be treated and the rights that will be given to customers in the event that the company files for bankruptcy. Specifically, it is not clear how the digital assets will be treated in the event that the company files for bankruptcy.

In addition, the Terms of Service make it abundantly clear that all titles and rights concerning any assets are transferred from Celsius customers to the company.

Evidence required

Even though the Terms of Service contain sufficient information, the committee of unsecured creditors still wants the company to provide evidence that it owns the stablecoins. This is despite the fact that the Terms of Service contain both bold lettering and fine print.

Because the creditors are of the opinion that the lender does not have any proof to support this scenario, they have issued a demand for the provision of facts and arguments that can unequivocally demonstrate that the assets are owned by the lender.

To suggest that the bankruptcy case of Celsius Network has been anything but easy would be an understatement. The corporation has been forced to contend with opposition at each and every stage of the process.

However, on August 17th, the court did rule in favor of Celsius' plea to retrieve the bitcoin holdings that had been obtained as a result of the mining activities that the firm had participated in.

Creditors have written a number of letters to the court pleading with the judge to release monies to customers since the creditors are in desperate need of their own money. These letters were delivered to the court after the creditors sent a number of letters to the court.

In a letter, one individual expressed her opinion that stablecoin holdings ought to be dealt with in a different fashion.