Celsius finally filed for bankruptcy: Law Decoded, July 18-25
Reducing your original $820 million debt to just $0.013 over a month can’t be easy. And it’s no surprise that such heroic momentum drove Celsius out of business. Last week, the crypto lending platform voluntarily filed petitions for Chapter 11 reorganization after closing the last of its decentralized finance (DeFi) debt owed to Compound, Aave, and Maker.
Although a Chapter 11 bankruptcy allows a company to stay in business and restructure its obligations, and there are successful examples such as American Airlines, Delta, General Motors, Hertz and Marvel, some experts express their skepticism about Celsius’s chances of staying afloat. The procedure could mean Celsius investors and customers may not see their funds returned for the “foreseeable future”, similar to the fallout from the 2014 Mt. Gox hack, which is still ongoing.
And, external legal pressure surely does not help the platform. With the local Department of Financial Regulation (DFR) reminding users that the company is not licensed to offer its services in the state, Vermont became the sixth US state to issue a warning against Celsius.
A point to Ripple in a case against the SEC
The U.S. Securities and Exchange Commission (SEC) suffered a major blow in its case against Ripple after a U.S. judge denied its claims for attorney-client privilege over internal documents related to Hinman’s speech. In deny the motion, U.S. Magistrate Judge Sarah Netburn denounced the SEC’s hypocrisy by arguing that the speech – in which former civil servant Bill Hinman suggested that Ether (ETH) was not the security – was a personal matter for Hinman while claiming he should be shielded because he received legal advice from the SEC to confirm the commission’s policies.
Andorra moves closer to its Digital Assets Law
A small European country nestled between France and Spain, Andorra, is rapidly moving to its crypto regulatory framework – the respective digital asset law was recently approved by the local government. Although cryptocurrencies are not legal tender in Andorra and the Digital Assets Law does not make any proposals regarding the means of exchange, the CEO of a local Bitcoin (BTC) company points out that Andorra could adopting a bitcoin standard, mining bitcoin with renewable energy, tackling bitcoin as a reserve asset, and welcoming bitcoin-centric businesses from all over the world.
Cryptocurrencies will become a “financial product” in South Africa
The South African Reserve Bank is expected to introduce regulations next year that will see cryptocurrencies classified and treated as financial assets to balance investor protection and innovation. With over six million people in the country exposed to cryptocurrency, regulation of the space has long been a talking point – it will allow the sector to be scrutinized for money laundering, tax evasion and the financing of terrorism. And, of course, to comply with global guidelines set by the Financial Action Task Force.