It turned out that Celsius did not perform adequate accounting and operations controls.


The independent auditor overseeing the bankruptcy process of crypto lending firm Celsius claims that the company failed to perform “adequate” accounting and operational controls when managing client funds.

Auditor Shoba Pillaycited his stark observations of the bankrupt crypto lending platform in the interim report published on November 19.

One of the key issues raised in Pillay’s report was the launch of Celsius’s Custody (retention) program “without adequate accounting and operational controls or technical infrastructure.” This led to a cash shortage in Custody wallets, making it necessary to cover the shortfall from other savings.

“[…] Making a study to separate or group assets associated with custodial accounts was all intertwined with the main wallets.”

Celsius’ Custody program, when launched on April 15, allowed users to transfer, swap and use their coins as collateral. The program was initiated when securities regulators in New Jersey requested Celsius to create a product other than the award-winning Earn product.

Pillay said the confusion of wallets made it difficult to determine which assets belonged to which client during the bankruptcy process:

“So customers are uncertain about what assets they own at the time of bankruptcy.”

In the interim report, the reasons that forced the platform to stop shooting on 12 June were also mentioned.

According to Pillay, the breaking point was June 11, when customers did not have enough funds left in their Custody wallets. The amount of funds fell another 24 percent through June 24 to $50.5 million.

It turned out that Celsius did not perform adequate accounting and operations controls.
Digital asset surplus and shortfall in Celsius’s Custody wallets. Source: US Bankruptcy Court

Customers affected by Celsius’ bankruptcy must apply by June 3, 2023 to get their assets back. Celsius’s November 20 to your tweet Accordingly, participants in the company’s asset allocation program are not required to present proof of their receivables.



Soruce : https://tr.cointelegraph.com/news/celsius-had-insufficient-accounting-and-operational-controls-says-examiner

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