Celsius, a cryptocurrency lender that filed for bankruptcy in July, has raised objections to Galaxy Digital’s fee request for storing its digital assets.
Celsius and Galaxy began their relationship on Dec 2, 2022, when the two companies entered into a purchase agreement in which Galaxy acquired Celsius GK8, a blockchain security company.
Galaxy Digital has requested a fee of over $190,000, which Celsius deems excessive, considering that the company is only storing assets worth $2.67. Celsius argues that Galaxy Digital’s services were not critical to the company’s operations and, therefore, should not receive priority in repayment.
Celsius filed for bankruptcy protection in July. Before the bankruptcy, the two companies had a business relationship in which Celsius stored cryptocurrency with Galaxy and paid a monthly fee for the services.
Furthermore, Celsius sold part of its business to Galaxy, and Galaxy was left with a minimal amount of cryptocurrency. However, Galaxy continued to invoice Celsius a monthly fee of $30,000, even though there was a small amount of cryptocurrency left on its platform.
Galaxy filed a motion to recover its administrative costs from the preservation of Celsius’ assets, while Celsius objected to the motion, arguing that the fees were disproportionate and unnecessary given the low value of the remaining cryptocurrency
However, in response to Galaxy’s motion, Celsius has filed a request with the court to deny the motion and the associated fees. Celsius argues that Galaxy has not demonstrated that the costs were actual and necessary to preserve Celsius’ assets.
The U.S. bankruptcy court for the Southern District of New York is currently reviewing the issue of Galaxy’s request for fees and Celsius’ objection.
The court is taking a practical approach rather than a strictly legalistic one in evaluating whether it should grant administrative priority to Galaxy. Likewise, the court is actively seeking evidence that shows Galaxy’s services had a measurable, positive impact on Celsius’ financial situation.
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