Celsius Network Reportedly Faces US Federal Investigation

Bankrupt crypto lender, Celsius Network is now facing a federal investigation in the United States due to its alleged operational irregularities, according to a report by Bloomberg on Wednesday.

“The number and extent of investigations of the debtors by governmental entities is significant: Celsius is apparently subject to enforcement proceedings or investigations in at least 40 states, in addition to investigations or inquiries involving the federal government,” counsel of the creditors stated in a Tuesday filing.

The crypto company is facing investigations by multiple state regulators too, Texas State Securities Board highlighted in a statement on September 7.

A Bankrupt Company

Celsius gained popularity by offering interest in cryptocurrency deposits. Once touted as a very promising project, the doom of the platform came when crypto prices slumped earlier this year. The company initially froze client withdrawals in June, citing market volatility, and filed for bankruptcy
Bankruptcy

Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the courts. Bankruptcy can only occur with a court filing. Since bankruptcy is a legal state, once the petition is filed with the appropriate court, local and state laws vary greatly. Different Kinds of Bankruptcy In the US, these legalities are referred to as Chapters 7 and 11, 12, and 13. Chapter 7 is a liquidation procedure, where all assets are sold, and the court oversees the distribution of the money to creditors based on their standing. Both businesses and individuals can file for chapter 7. Chapter 11 is a reorganization process where businesses are allowed to freeze their debts and continue to operate. In contrast, a method and procedure are negotiated through the courts to satisfy the obligations of the company. Chapter 13 is called a wage earner plan and helps people…