Cryptocurrency Lender Celsius Didn’t Record ~7000 Transfers Worth Billions

Lavina Daryanani
Source: Vulcan Post

Pending court procedures, hearings and other developments pertaining to cryptocurrency companies that crashed last year have been taking place back to back lately. Recently, the SEC sued Do Kwon and Terraform Labs. In its filing, the agency alleged that over 10,000 BTC were transferred and roughly $100M was cashed out by Do Kwon from a Swiss bank.

Also Read: Over 10,000 Bitcoin Transferred, $100M Cashed by Do Kwon During Fraud

Celsius never recorded some intercompany transfers

Now, according to another development that unraveled on Friday, Celsius inadequately recorded transactions between its affiliate companies. So, reconstructing intercompany claims completely now is almost like finding a needle in a haystack.

Also Read: Celsius advisory fee reaches $53M: Firm files deadline for user claims

The lender recently filed a statement outlining the amount type of potential claims it held against its affiliates. Notably, the $9.1 billion inter-company claim held by Celsius Network LLC against Celsius Network Limited “does not consider the inadequacies in record keeping.” The same encapsulates roughly 7,000 transactions not recorded between the two entities in the accounting books and records.

Further elaborating on the same, the official filing noted,

“Given the dearth of record-keeping, it may not be possible to fully reconstruct the intercompany Claim. If it were at all possible, it would be a time and cost-intensive forensic accounting exercise that would likely require the engagement of a forensic accounting firm to manually reconstruct every intercompany transaction at a significant cost to the Debtors’ estates.”

Giving credit to the “months of analysis” done, the filing noted that the best-case estimate for the full claim held by the former against the latter is around $3.5 billion.

In other related news, a New York judge granted the cryptocurrency lender permission to sell Bitmain mining company coupons. Bitmain coupons with Celsius could likely fetch over $7 million, according to estimates by the lender. Parallelly, Celsius received approval from the court to allocate 94% of each user’s eligible assets. The court is set to rule in due time about what will happen to the remaining 6%.

Also Read: Celsius: ‘Eligible Users’ Are Now Allowed To Withdraw Funds