Celsius did not record about 7000 transactions between subsidiaries and could not completely reconstruct the inter-company claims
It is reported that according to the court documents cited by CoinDesk, Celsius did not fully record about 7000 transactions between it and its affiliated companies within three months before filing for bankruptcy, resulting in almost impossible to completely reproduce the inter-company debt structure.
Interpretation of this information:
As reported by CoinDesk, Celsius, a company that deals with cryptocurrency exchanges, did not fully record around 7,000 transactions with its affiliated companies within the three months prior to filing for bankruptcy. This results in difficulties in fully reproducing the inter-company debt structure.
The unrecorded transactions are a significant issue as it hinders the court’s ability to assess the extent of the company’s obligations to its creditors. The lack of complete documentation makes it challenging to determine who is owed what amount and which assets should be used to repay them.
The outcome of this primary problem can be detrimental to the company’s creditors, as the distribution of assets will be challenging, and there may not be enough to cover all of them. It also indicates that the financial administration of the company was not done efficiently, which leads to questions of possible financial mismanagement or impropriety.
It is essential to note that given the nature of digital transactions in the cryptocurrency industry, accurate record-keeping is crucial. This situation highlights the need for companies that deal with cryptocurrencies to keep comprehensive financial records of all transactions in real-time, as well as ensure they are fully audited and compliant with regulations.
In conclusion, the failure to record the transactions between Celsius and its affiliated companies appropriately has created a significant challenge for the creditors and the court to fully assess the company’s obligations. It highlights the importance of accurate financial record-keeping and the need for cryptocurrency companies to comply with regulatory requirements.
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