Crypto lending platform Celsius filed for Chapter 11 bankruptcy on July 13, 2022. Although the Celsius case involves digital assets, it remains subject to United States Bankruptcy Code under the Bankruptcy Court for the Southern District of New York. While this may be, a series of unusual events have ensued since Celsius filed for bankruptcy. For instance, Chief United States Bankruptcy Judge Martin Glenn — the judge overseeing the Celsius case — stated on Oct. 17 that the court will look abroad for guidance. Glenn specifically mentioned that “Legal principles that are applicable in the United Kingdom are not binding …

Crypto lender Celsius Network's legal journey has gained another chapter as Bitcoin miner Core Scientific accused the company of refusing to pay its bills since filing for chapter 11 bankruptcy, according to court papers filed on Oct. 19. Core Scientific, which is one of the largest publicly-traded crypto companies, claims the default on payments is threatening its financial stability, already hurt by crypto winter and high energy costs. In the court filings, Celsius alleges that Core Scientific delayed mining rig deployment and supplied them with less power than required under their contract. Celsius is reportedly seeking a court order holding …

Three Arrows Capital. Celsius. Voyager Digital. The list of crypto bankruptcies, shutdowns and trading freezes has been endless in 2022. And the year isn’t over yet. This week, German crypto bank Nuri urged its users to withdraw funds ahead of the company’s planned shutdown in December — at least Nuri’s users were given proper notice. The crypto bear has been relentlessly cleansing the market of excess, leverage, poor risk management and outright scams. If industry prognosticators are to be taken seriously, the market could see one final capitulation before conditions begin to improve. This week’s Crypto Biz chronicles Nuri’s shutdown, …

Customers of bankrupt crypto lender Voyager Digital may be able to recover 72% of the value of their accounts under a tentative deal with FTX US, according to court documents. However, United States bankruptcy judge Michael Wiles during a court hearing said the tentative sale would not be final until it receives the approval of Voyager’s creditors and he approves the bankruptcy payout plan, saying during the court hearing: “If the plan falls apart, there's no part of this agreement that survives.” There is also the inclusion of a clause called a “fiduciary out” that allows Voyager to cancel the …

German crypto bank Nuri has told its 500,000 users to withdraw funds from their accounts as the firm prepares to shut down and liquidate the business, marking it as another victim of the 2022 bear market. Nuri first reported liquidity issues in August, after announcing that it had filed for insolvency amid the economic strains of Crypto Winter. It said at the time that business would continue as usual, as it worked on a restructuring plan and securing a buyout, however an acquisition has failed to materialize. In an Oct. 18 blog post, Nuri CEO Kristina Mayer noted that despite …

Voyager Digital has preferred not sue its top executives for incompetence, in spite of their role in approving a huge loan to Three Arrows Capital (3AC) without adequate due diligence. That loan was a key element leading to Voyager Digital’s bankruptcy. Court papers filed Oct. 17 show that a Voyager Digital internal special committee has proposed that CEO Stephen Ehrlich and chief commercial officer (formerly chief financial officer) Evan Psaropolous keep their jobs and not be sued. The court filing describes the due diligence process for the 3AC loan: “On February 13, 2022, 3AC provided Voyager with a statement signed …

Liquidators for Three Arrows capital (3AC) have asked a U.S. court to grant them permission to subpoena the embattled crypto hedge fund's founders through “alternative means.” To this date, the whereabouts of Three Arrow Capital founders Su Zhu and Kyle Davies remains unknown, with some accusing the duo of being on the run. In a court motion filed to the United States Bankruptcy Court Southern District of New York on Oct. 14, advisory firm Teneo claimed that standard methods to contact the duo have failed as the “Founders’ whereabouts remain unknown.” It also said that the request for Advocatus Law …

The lack of crypto regulation in the United States has long complicating the lives of users and service providers, and now a judge has acknowledged the pain the judiciary feels from its absence too. Chief United States Bankruptcy Judge Martin Glenn, the judge who is leading the Celsius case, said the court will look abroad for guidance in the case. Glenn wrote in an Oct. 17 filing in the Celsius case that: “Many, or pe[r]haps most, cases involving cryptocurrency may raise legal issues for which there are no controlling legal precedents in this Circuit or elsewhere in the United States …

The Texas State Securities Board (SSB) and the Texas Department of Banking (DOB) raised an objection in court against Voyager Digital’s disclosure statement, questioning the various methodologies and calculations used to estimate the fair market value of the bankrupt exchange’s crypto assets. In a pleading filed with the United States Bankruptcy Court for the Southern District of New York, the attorneys for the SSB and DOB objected to the order approving the adequacy of Voyager’s amended disclosure statement. Voyager Digital filed for Chapter 11 bankruptcy in New York in July 2022, while proposing a recovery plan for investors. The Texas …

Bitcoin (BTC) miner Marathon Digital Holdings has revealed $81.3 million worth of exposure to recently bankrupted mining hosting provider Compute North. Marathon provided a breakdown of its exposure on Oct. 6 explaining the majority was in operating deposits worth $50 million, noting these deposits “were primarily related to King Mountain and Wolf Hollow security deposits and prepayments associated with the ongoing operation of those sites.” The remainder is split between $21.3 million allocated to “an unsecured senior promissory note” and $10 million in convertible preferred Compute North stock. It comes weeks after Compute North submitted a Chapter 11 bankruptcy filing …

Teneo, the liquidation firm in charge of the Three Arrows Capital (3AC) bankruptcy process, confirmed in a statement to Cointelegraph on Oct. 5 that it has custody of the NFTs moved from the addresses related to Starry Night Capital, a fund launched by the co-founders of the now-bankrupt hedge fund. According to the firm, the collection move was part of the liquidators' duty of identifying assets and maximizing recoveries on behalf of all creditors. A report from Bloomberg estimated that the Starry Night Capital collection’s total value sits at around $35 million. It represents only a tiny fraction of the …

Bankruptcy or insolvency is not in “Nexo’s reality” according to the crypto lending platform’s co-founder and managing partner, Kalin Metodiev. In an Ask Me Anything (AMA) video posted via YouTube on Oct. 4, founders and managing partners Metodiev and Antoni Trenchev addressed community questions and recent FUD-related rumors that Nexo could soon face insolvency issues. Responding to a question about the insolvency/bankruptcy rumors and whether Nexo will be the “next Celsius and Voyager,” Metodiev explicitly stated that: “Insolvency, bankruptcy are nowhere in Nexo’s reality, and we believe, we hope, we aspire, [and] we[‘re] work[ing] very hard to deliver a very …