Celsius Networks, a crypto lending company that had frozen withdrawals in June and has been proceeding through Chapter 11 bankruptcy since July, 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 liquidity to help “fund the Debtors’ operations.”
A notice was filed by the Celsius’ legal team from Kirkland & Ellis law firm on Thursday. A hearing where the court would accept or decline the motion will take place on Oct. 6.
According to the filing, the company currently holds an equivalent amount of $23 million in on different stablecoins. If sold, these funds would go to support Celsius’ current operations. Citing 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 daily operations without excessive court or creditor oversight and protecting secured creditors and others from dissipation of the estate’s assets.”
Celsius recently filed a motion, pledging to partially return money to customers. However, it would only apply to Custody and Withold Accounts and for custody assets worth $7,575 or less in value. The move drew criticism from some industry leaders, as the limitation means that only $50 million out of $210 million could be released.
The pressure on Celsius continues to rise as on Aug. 31, an ad hoc group of 64 custodial account holders filed a complaint to recover their assets. The plaintiffs noted that Celsius has “not honored any withdrawals from any programs,” including custody services.