During a bankruptcy court hearing, the Celsius Network creditors committee managed to ban the company from selling some of the mined bitcoins. Decrypt writes about it.

The startup group also described the assurances given by crypto lending platform Alex Mashinsky a few days before its clients’ assets were frozen as “empty and false”.

The committee’s lawyers explained the initiative with the need to collect additional information regarding the sale of the first cryptocurrency and the use of proceeds.

In early July, the court allowed the company to spend more than $5 million to complete the construction of a mining facility in Texas. According to representatives of the platform, this could take about two months. The decision was criticized by the Ministry of Justice.

On July 19, the company submitted a business restructuring plan. It includes the direction of a subsidiary mining company’s profits to compensate for losses of users and payments to creditors. Before that, Celsius Mining SEC application for public offering.

The committee also stated that the court intends to enforce the 2004 Rule as part of a “large investigation”. It includes statements from interested parties and submission of documents in a process similar to what happens in civil litigation.

On July 13, Celsius filed for Chapter 11 bankruptcy in New York court. The company said its liabilities exceeded its balance sheet assets by almost $1.2 billion.

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