Celsius has requested permission to sell stablecoins

Celsius Networks, a crypto lending company that had frozen withdrawals in June and is going through a phase of bankruptcy since July 11, asked the United States Bankruptcy Court for the Southern District of New York for permission to sell its stablecoin holdings. This should allow the company to generate a source of funds to “finance operations for borrowers”.

It was submitted on September 15 by Celsius’ legal team from the Kirkland & Ellis law firm, and a hearing on whether the court will accept or reject it will be held on October 6.

According to the filing, the company currently holds the equivalent of $23 million in eleven different stablecoins. If sold, these funds will go to support Celsius’ current operations. Referring to section 363 of the Bankruptcy Code, the filing notes:

“Section 363 of the Bankruptcy Code is designed to strike a balance between allowing a business to continue its day-to-day operations without undue court or creditor control and preventing secured creditors and other creditors from dispersing its assets.”

Celsius recently filed a claim with a promise of a partial refund to customers. However, it only applies to custodial and deductible accounts and to custodial assets valued at $7,575 or less. The move has drawn criticism from some industry leaders as only $50 million of the $210 million could be released.

Related: Court records show Celsius will run out of money by October

In the year On August 31, 64 temporary custodial account holders filed complaints to recover their assets as the pressure on Celsius continued to mount. The defendants alleged that Celsius “did not honor his withdrawal from any programs,” including custodial services.

According to the complaint, that violates the “plain language of the borrowers’ terms of use” because they provide that title to the retention property “remains at all times with the beneficiary.”