The past week saw three mainstream banks with ties to the crypto industry shut down. The prime concern among crypto stakeholders was the fate of the funds deposited with these financial institutions. The Celsius Network recently confirmed that all the cash belonging to its bankruptcy estate was secured.
The news came as a relief to the bankrupt crypto lender’s creditors, who have already seen their funds deplete thanks to the expensive chapter 11 proceedings. Celsius recently filed an update regarding its cash management system in the U.S. Bankruptcy Court for the Southern District of New York.
According to the court filing, the bankrupt crypto lender currently held its cash in multiple bank accounts at Signature Bank and Western Alliance (NYSE:WAL) Bancorporation, both of which have been approved by the U.S. Trustee as depositaries. In line with the Trustee’s guidelines, the lender is in the process of transferring the funds to other authorized depositaries.
As far as the safety of the funds is concerned, Celsius and its advisors confirmed in the court filing that their funds held at Signature Bank and Western Alliance are collateralized by at least 115% with four different depository bonds.
“We will continue to work to maximize the safety of cash and cryptocurrency holdings for the benefit of the estates and will provide the Court and all stakeholders with any additional updates as necessary,” Celsius tweeted earlier today.
Celsius is confident that its request to move the funds out of Signature Bank will be honored and that no funds will be lost in the process. Simon Dixon, a high-profile creditor of the bankrupt crypto lender, believes that while the onboarding process at banks is currently difficult, the transparency from Celsius’ chapter 11 proceedings will help with the process.
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Source: Cryptocurrency - investing.com
