Bankrupt crypto lender Celsius Network has filed an “adversary complaint” against institutional investment firm EquitiesFirst Holdings.
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According to the sealed motion, Celsius is requesting injunctive relief and a declaratory judgment associated with the “recovery of money/property.” EquitiesFirst Holdings and its Chied Executive Officer (CEO) Alexander Christy were named as defendants in the filing.
Markedly, the Celsius Network’s motion was filed in an attempt to recoup its assets from the Indianapolis-based private lending company which reportedly owes $439 million in cash and cryptocurrency. On the same day, the bankruptcy crypto exchange also filed a summon asking that EquitiesFirst provide a motion or respond within 35 days.
EquitiesFirst Refuse Celsius Network a Collateral Refund
Celsius Network’s relationship with EquitiesFirst started in 2019 when the former began to take collateralized loans from the latter.
Based on a subsequent bankruptcy filing, former Celsius CEO Alex Mashinsky claimed that there was a “lack of institutional lending available to cryptocurrency companies” at that time, hence the crypto lender was forced to seek funds from EquitiesFirst to “support its operations.”
The relationship however, went sour in 2021 when Celsius Network tried to retrieve its pledged collateral from the private lender but was told that the exact amount collaterized could not be returned.
Celsius Network to Retrieve $439M From EquitiesFirst
At first, the total fund owed by EquitiesFirst to Celsius Network was $509 million and this was because the $439 million loan was over-collateralized. The Indianapolis-based private lending firm began to return the collateral bit by bit from September 2021. About $5 million was paid back by EquitiesFirst to Celsius Network every month.
As of July 2022 when Celsius Network filed for Chapter 11 bankruptcy protection due to the harsh market conditions on the year, EquitiesFirst owed the crypto lender a total of $439 million comprising of $361 million in cash and 3,765 Bitcoin (BTC).
StakeHound Breach Contract with Celsius
A few months ago, Celsius Network brought a legal complaint targeting the liquid staking platform StakeHound for allegedly failing to repay $150 million in ether (ETH), Polygon (MATIC), Polkadot (DOT), and other tokens. A filing submitted by Celsius show that in 2021, the company provided StakeHound with access to 25,000 native ETH stakes, 35,000 native ETH, 40 million MATIC, and 66,000 DOT.
However, there were some mix-up in the transaction which led StakeHound to request litigation over Celsius.
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