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State Securities Regulators Object to Celsius’ Court Motion to Sell Stablecoins – Bitcoin News

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State Securities Regulators Object to Celsius's Court Motion to Sell Stablecoins


As Celsius’ bankruptcy proceedings continue, the court’s trustee William Harrington appointed an examiner on Thursday in order to review the company’s finances, according to a filing submitted on September 29. On the same day, state securities officials from Vermont and Texas filed objections to the crypto lender accessing the company’s stablecoin cache. 15 days prior to the objections, the crypto lender filed paperwork that said Celsius was looking to access $23 million in stablecoin reserves.

State Securities Officials Step Into the Celsius Bankruptcy Battle

State securities regulators have been very busy with cryptocurrency cases in recent times. On September 29, the Texas State Securities Board (TSSB) filed an objection against a recently filed motion by Celsius. The motion was Celsius’ plan to sell $23 million in stablecoins as the company petitioned the court on September 15 to gain access to the stash.

“The debtors fail to disclose in the motion how [many stablecoins] will be sold, and how the monetization of the stablecoin ultimately benefits the bankruptcy estate and the many consumer creditors of the debtors,” the TSSB objection notes. The Texas securities regulator further noted that while the examiner was being appointed the request was “inappropriate.”

State Securities Regulators Object to Celsius' Court Motion to Sell Stablecoins
On Thursday, the Vermont Department of Financial Regulation also joined in on the objections against Celsius accessing the stablecoin cache to sell.

After the filing submitted by the TSSB, the Vermont Department of Financial Regulation (VDFR) also filed an objection to the stablecoin motion Celsius filed 15 days ago. Vermont’s securities regulator detailed on Thursday that the motion was “unclear” and further “creates [a] risk that the debtors will resume activities which violate state law.”

The VDFR objection explains that “at least 40 state securities regulators were engaged in a multistate investigation” into Celsius and its principals.

“It is not at all clear what the debtors intend to do with the proceeds of any such sales, whether the relief requested extends to stablecoin-denominated assets such as retail loans to consumers, and the degree to which debtors’ use of sale proceeds will be supervised by the court,” the VDFR filing details.

Trustee Adds Court Appointed Examiner to the Celsius Bankruptcy Case

Celsius had issues with state securities regulators last year before the firm suspended withdrawals and eventually filed for bankruptcy protection. At the end of September 2021, securities regulators from New Jersey and Texas cracked down on the crypto lender. At the same time, the Alabama Securities Commission filed a cease and desist order against Celsius, and the state of Kentucky followed.

In addition to Celsius, Blockfi had issues with regulators in New Jersey, Kentucky, Vermont, Texas, and Alabama around that same time. Four days ago, the crypto lender Nexo was hit with enforcement actions from California, New York, Washington, Kentucky, Vermont, South Carolina, and Maryland.

During the Celsius bankruptcy proceedings, recently leaked audio that featured Celsius executives uncovered plans to create a so-called IOU crypto asset. Two days before the objections from the state securities regulators, Celsius CEO Alex Mashinsky resigned. The court’s trustee William Harrington also appointed Shoba Pillay as the court-appointed examiner on Thursday.

State Securities Regulators Object to Celsius' Court Motion to Sell Stablecoins
Token summary for the company’s native crypto asset celsius network (CEL).

After Mashinsky resigned, the company’s native crypto asset celsius network (CEL) dropped in value against the U.S. dollar. CEL is down 7.6% this week and 18.9% during the last 14 days, while year-to-date statistics show CEL has shed 70.7% against the greenback. FTX and Okx are the top two crypto exchanges trading CEL and the digital asset has around $7 million in 24 hour global trade volume.

Tags in this story
$23 million in stablecoins, Bankruptcy, Bankruptcy Court, Celsius, Celsius CEO Alex Mashinsky, Celsius crypto lender, Chapter 11 Bankruptcy, court examiner, Court Filings, Court trustee, Crypto lender, examiner, Insolvency, judge Martin Glenn, reorganizing, Shoba Pillay, Southern District of New York, Stablecoins, state securities regulators, Texas State Securities Board, TSSB, VDFR, Vermont Department of Financial Regulation, William Harrington

What do you think about the state regulators objecting to Celsius’ plan to sell stablecoin assets? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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Regulation

Castles Made of Sand Dollars: SBF, FTX, and other Three Letter Agents – Bitcoin Magazine

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Castles Made of Sand Dollars: SBF, FTX, and other Three Letter Agents - Bitcoin Magazine



The story of Bitcoin has certainly had its fair share of nefarious characters, criminal activity, bad haircuts and worse wardrobes, and yet our anti-hero du jour has seemed to outdo them all. Sam Bankman-Fried, better known by the three letter acronym SBF, burst onto the scene at the peak of the 2017 bubble, founding Alameda Research that September, just four years after graduating from an internship into a full-time position at one of the world’s largest market makers, Jane Street Capital.

SBF is the son of Stanford Law professor and founder of left-wing super PAC Mind The Gap, Barbara Fried, and Stanford professor Joseph Bankman, an expert on tax shelter laws and government regulation. At the start of 2018, SBF had struck digital gold while taking advantage of the arbitrage opportunity presenting itself between a higher demand for bitcoin in the Asian market, colloquially known as the “kimchi premium”. By the end of the year, and after amassing a considerable fortune from this high-volume bitcoin/dollar spread, he officially moved to Hong Kong, formally founding the derivatives exchange FTX in the following spring.





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Kazakhstan Continues Bitcoin Mining Regulation – Bitcoin Magazine

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Kazakhstan Continues Bitcoin Mining Regulation - Bitcoin Magazine



Kazakhstan is moving forward with regulation that will further stifle its bitcoin mining industry.

The country’s federal parliamentary body has completed secondary approval of a bill “On Digital Assets in the Republic of Kazakhstan.” With a third approval, the legislation will introduce new licensing requirements for bitcoin miners based on their facility ownership and operational structure. It would also require that miners purchase their electricity from the energy provider Korem at market rates.

Previously, specific reporting and tax requirements were implemented, including registration of names, locations and quarterly reports to the government. These occurred as a result of the major influx of mining amidst energy shortages and protests, all while bitcoin miners fled China as a response to the government’s banning of bitcoin.

Kazakhstan’s close proximity to China and previously highly favorable energy access led to the large amounts of hash rate migrating to the country. Afterwards, Kazakhstan went as far as seizing up to $200 million in mining equipment who did not comply with regulation, and the country continues to try and absorb the benefits of the influx in bitcoin mining using legislation like this most recently approved bill.

Bitcoin Magazine previously reported on regulation in Kazakhstan, citing a report from the Russian media outlet Tass. In the report, Ekaterina Smyshlyaeva, a member of the Committee on Economic Reform and Regional Development of the Majilis (Kazakhstan’s federal parliamentary body) detailed the government’s intentions, describing how, “Kazakhstan was used as a raw material appendage of the blockchain industry. [Through] bills, we oblige miners to license in Kazakhstan, that is, to create legal entities and become full-fledged subjects of taxation.” 



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Paraguay Fails To Pass Bitcoin Mining Bill – Bitcoin Magazine

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Paraguay’s Bitcoin Bill Passes the Senate



  • The Paraguay legislature did not pass a bill that would have regulated cryptocurrency mining in the country.
  • The bill, originally passed in July of 2022, was subsequently vetoed by President Mario Abdo Benítez in August, which sent it back to the legislature.
  • If passed, the bill would have limited outsized charges levied against bitcoin miners for their energy usage.

According to a Coindesk report, “The industry has found itself in a fight with the local grid operator provider, Ande, and some members of the legislature who claim that the grid’s infrastructure cannot handle the excess load and that the industry doesn’t greatly benefit the local economy and society.”

Ande had requested that the Paraguayan government raise electricity tariffs by as much as 60% over the industry standard — and the bill would have capped these increases to 15%.

Paraguay has become a major location for bitcoin mining as a result of the country’s abundant power. The Itaipú dam, one of the largest in the world, has proven to be a boon of cheap energy, enabling a rush to absorb this value into the Bitcoin network via mining. If the country seeks to expand on this rush of investment into the energy infrastructure of the country, getting regulation correct is critical to not stifling that.

Industry players involved in Paraguay include Bitfarms, who has a 10MW facility based there, and Pow.re, who has operations totaling 12MW there.



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