The Department of Justice (DOJ) has filed an objection to Celsius’ proposal to resume withdrawals for select clients and sell its stablecoin holdings.

The Justice Department maintains that Celsius’s financial situation is not transparent and that such important decisions should not be considered until an independent investigation report is submitted.

The Justice Department’s action adds to objections filed last week by the Texas Securities Board, the Texas Banking Department and the Vermont Financial Regulatory Department. All three oppose Celsius’ sale of its stablecoin holdings, arguing that there is a risk that the company could use the capital to restart operations in violation of state law.

In a filing in bankruptcy court for the Southern District of New York on September 30, U.S. Attorney William Harrington articulated an objection to allowing Celsius to screen its “custodial” and “custodial” clients, citing a lack of transparency with the company. Finance.

Harrington argues in a statement that such findings should not be made public until after an independent investigation into the Celsius business has been completed:

“The proposals are premature and should be rejected even after the expert’s report has been submitted. First, the withdrawal movement aims to impulsively distribute funds among a group of creditors before the debtors’ cryptocurrency assets are fully explored.”
The Justice Department also opposed a possible stablecoin sale, highlighting similar concerns from regulators in Texas and Vermont that the Celsius proposal did not specifically address the “impact of such a sale or distribution” on business going forward.

“Secondly, Stablecoin Motion seeks to liquidate stablecoins held by debtors without disclosing ownership, segregation, or the impact of this sale on subsequent distributions to creditors who may have stablecoins when deposited with debtors.”

Appointment of an independent auditor
According to Harrington, the “American Trustee” appointed Shuba Pillai as auditor on September 29, and the New York Bankruptcy Court approved the appointment the same day.

Pillay will have approximately two months to prepare and submit an audit report on Celsius, which we hope will provide clear asset and liability information.

Harrington, in fact, argued that even Celsius’ offer should not be considered until after the expert’s report was presented, stating that “any distribution or sale to interested parties should be delayed, and the trustee in the United States and the court to be able to decide” on the value of Celsius’ liabilities and claims, his assets, and what the debtors “actually intend to pay their creditors”.

Related: Crypto Biz: Voyager Digital Auction Completed – Now What?

Simon Dixon, founder of crypto investment platform BnkToTheFuture, who was a lead investor in Celsius, predicted via Twitter on Oct. 1 that Celsius would attempt to redeem its lenders’ CELI tokens in a reorganization plan that “won in the end.” t happen” will present regulators and regulators. Previous requests should be denied.

If that happens, Dixon sees it sparking a Celsius asset war similar to the recent $1.3 billion Voyager Digital asset auction won by FTX US.

Source: CoinTelegraph