According to interim reports, inadequate accounting controls were the root cause of the liquidity crisis.
Insolvent cryptocurrency lender Celsius successfully petitioned the US bankruptcy court for the Southern District of New York to extend the deadline for submitting proof of claims to January 3, 2023. This request was granted by the court. The directive is aimed at people who have claims against Celsius Network LLC and its seven affiliates, all of which are listed as debtors in the Chapter 11 bankruptcy proceeding that is currently ongoing.

The decision states that customers who are in agreement with the schedule that Celsius has established for their claims do not need to submit the PoC.

In a thread on Twitter dated November 20, the financially troubled lender noted, "this week, the bankruptcy court approved our motion to set the bar date, which is the deadline for all customers to file a claim." The bar date refers to the date after which a customer is no longer eligible to file a claim. The date of the bar examination will be in January of 2023.

According to the ruling from the court, the debtors are required to send the PoC forms for claims that appear in the debtors' schedule and are not marked as unliquidated, contingent, or disputed via email. The forms must include the named addresses and email addresses that are listed in the debtors' books.

In this regard, Celsius mentioned that "customers should expect to receive a notice regarding the bar date and next steps in the proofs of the claim process from our claims agent, Stretto," and that this notice could come in the form of an email, a physical letter, or a notification within the Celsius app.

The most recent report reveals that Celsius' operations do not have adequate levels of control, which raises questions about the company's future.
According to interim findings that were reported on November 19, in the midst of the court ruling, there is uncertainty in tracing wallets to the customers who are in debt. Examiner Shoba Pillay has revealed significant findings regarding the behavior of the lender prior to the collapse.

Pillay asserts that the lender was bankrupt as of the 12th of June and that Celsius LLC's custody program lacked "sufficient accounting and operational controls or technical infrastructure."

According to what Pillay wrote, "no efforts were made to segregate or separately identify any asset associated with the withhold accounts," and all of these assets ended up being mixed together in one wallet. As a direct consequence of this, it might take more time to make up for the losses. Before the wind-up, there is a lack of clarity regarding the matching of assets to debts owed to investors. According to reports, the next hearing, which is scheduled to take place on December 5, will shed light on custody and withhold accounts.

On July 13, Celsius requested protection under chapter 11 of the bankruptcy code, one month after it had temporarily halted customer withdrawals, swaps, and transfers. When it went bankrupt, the company had approximately 1.7 million customers and deposits totaling close to $12 billion from those customers.