Celsius Network’s $439 Million Battle: Crypto Lender Sues EquitiesFirst For Asset Recovery

Key Points:

• Celsius Network takes legal action against EquitiesFirst Holdings to recover $439 million in cash and Bitcoin.
• The dispute began when Celsius attempted to reclaim collateral in July 2021, leading to ongoing repayment since September 2021.
• The legal move is part of Celsius Network’s asset recovery efforts amid its bankruptcy filing.

Bankrupt crypto lender Celsius Network has taken legal action against lending firm EquitiesFirst Holdings in a bid to recover assets, as revealed in a bankruptcy court document filed recently.

Celsius initially sought collateralized loans from EquitiesFirst in 2019 due to the lack of institutional lending available to cryptocurrency companies at the time.

However, trouble arose in July 2021 when Celsius attempted to reclaim its collateral but was informed that the lender couldn’t return the provided amount.

The debt had grown to $509 million by July 2021 due to over-collateralization, but since September 2021, EquitiesFirst has been repaying it slowly at a rate of $5 million per month. As of July 2022, EquitiesFirst still owed Celsius $439 million, consisting of $361 million in cash and 3,765 Bitcoins.

In a sealed adversary complaint filed on September 6, Celsius Network seeks injunctive relief and a declaratory judgment related to the recovery of assets.

The complaint names both EquitiesFirst and its CEO, Alexander Christy, as defendants. Additionally, Celsius has filed a summons requiring EquitiesFirst to respond within 35 days.

Celsius Network was one of the first crypto firms to declare bankruptcy amid the 2022 bear market, with former CEO Alex Mashinsky facing charges of securities fraud and manipulation of the company’s CEL token.

Notably, the Federal Trade Commission imposed $4.7 billion in fines on Celsius for alleged user deception but suspended the judgment to allow the platform to use the assets as part of its bankruptcy proceedings.

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