CelsiusUCC Reaches Agreement With Bankrupt Crypto Lender Regarding Coin Security Proposal

Crypto Regulation
CelsiusUCC Reaches Agreement With Bankrupt Crypto Lender Regarding Coin Security Proposal

Celsius Network has agreed with the Unsecured Creditors Committee (CelsiusUCC) regarding a coin security proposal. According to CelsiusUCC, the coin security proposal was made to protect customer interests as well as the crypto lender’s remaining digital assets from external threats.

Committee Seeks Appointment of Authorized Individuals to Oversee Celsius’s Coins

In the proposal, CelsiusUCC asked the Bankruptcy Court of the Southern District of New York to appoint at least four Authorized Individuals who will be granted authority to hold the crypto company’s account keys.

The Committee also proposed that the said individuals’ identities be disclosed before the keys are transferred to allow interested parties to make objections.

In addition to the Authorized Individuals, the Committee also proposed the selection of an Acceptable Custodian to hold the backup account keys and implement the transfer of controlled crypto assets.

The proposal further stipulated that once picked, the Authorized Individuals can only authorize the transfer of any Celsius property, including its mined Bitcoin (BTC) stockpiles, following stringent conditions set by the bankruptcy court and with the express permission of CelsiusUCC.

Once chosen, Celsius will not be able to replace any of the Authorized Individuals. The company will also not be able to add other Authorized Individuals unless it gets written consent from the Committee or the bankruptcy court.

The coin protection proposal also stipulates that Celsius cannot unfreeze any of its Fireblocks workspaces except those used by its BTC mining subsidiary. The crypto company will also not be allowed to hold coins with any other entity apart from the Acceptable Custodian.

The names of the Authorized Individuals will only be revealed when needed and only to parties that need to know.

AoN Denies Rumors That It Insured Celsius For $750 Million

In other news, British-American insurance giant, AoN, has given short shrift to rumors that it had insured certain Celsius products to the tune of $750 million.

The bankrupt crypto lender boldly proclaimed on its homepage between June 5, 2022, and July 8, 2022, that its assets were insured for $750 million by AoN. Apparently, the insurance could be obtained through GK8, a division of Celsius that specializes in selling crypto vault software.

Before being acquired by Celsius in 2021, GK8 collaborated with the world’s largest insurer to offer insurance coverage to its clients. However, neither GK8 nor Aon are identified as Celsius’s suppliers or insurers in any document in the ongoing chapter 11 cases.

The week before halting customer withdrawals and freezing crypto assets worth more than $10 billion, Celsius boasted that it had secured $750 million in asset insurance from AoN.

But when the question was put to AoN by London solicitor Dr. Jonathan Levy, the insurance firm denied having any agreement with the crypto company. 

Replying to Dr. Levy, AoN’s legal representatives said: “We can confirm, however, that Aon does not currently have any formal arrangements or agreements with Celsius Network.”

The matter was also raised by Celsius creditor Immanuel Herrmann while objecting to Celsius Network’s proposal to hire Kirkland & Ellis as its legal representatives.  

A recurring theme in Celsius’s ongoing bankruptcy proceedings seems to be the apparent dishonesty of its top echelon. The fake insurance claim made a week before withdrawals were suspended appears to be further proof of a systematic effort to mislead investors.

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