Crypto lender Celsius is facing allegations of a “sham” corporate structure and poor record-keeping practices, as court filings suggest the company’s UK and US entities should be merged.

Customers are pitted against Series B investors as the bankruptcy proceedings continue. Celsius set up a Delaware LLC in 2021, transferring assets through a series of transactions.

However, the migration reportedly resulted in “intercompany chaos”, with “sorely lacking” internal records making it impossible to disentangle each entity’s affairs. Parallel filings by a committee of Celsius’ creditors suggest the reorganisation was a façade, with billions transferred between entities in a fraudulent manner.

Celsius now seeks to “substantively consolidate” its entities, with an auction of assets ongoing. Celsius’ restructuring highlights the importance of robust record-keeping practices in corporate structures, particularly in the cryptocurrency sector.