Celsius Wants to Sell its Mined Bitcoin. Texas Regulators Don’t Trust It.

The Texas State Securities Board cited Celsius’ “problematic asset deployment decisions” in a formal objection to bitcoin sales on Friday

article-image

blockworks exclusive art by axel rangel

share
  • Celsius has failed to outline how it plans to benefit its creditors with the sale proceeds, board members added
  • The company filed for bankruptcy on July 13 and listed a $1.2 billion shortfall on its balance sheet

Texas regulators have asked a US bankruptcy court to deny Celsius’ request to monetize its mined bitcoin, saying it’s concerned about how the proceeds would be used.

In a formal objection filed on Friday, shared by Law360, the Texas State Securities Board (SSB) said Celsius’ past admittedly involves “problematic asset deployment decisions, using the mined bitcoin to repay intercompany loans, potential mismanagement, and a continued failure to comply with state regulatory requirements.”

Celsius has failed to outline how it plans to benefit its creditors with the sale proceeds, board members added.

“The SSB does not object, generally, to [Celsius’] sale of its mined bitcoin for the benefit of the estate; however, the SSB is extremely concerned by [Celsius’] request for a comfort order that allows ambiguously broad authority to use these assets,” regulators said.

Celsius is among the highest-profile crypto lenders burned by the recent market downturn, driven by TerraUSD’s (UST) crash and the collapse of crypto hedge fund firm Three Arrows Capital

The company filed for bankruptcy on July 13 and listed a $1.2 billion shortfall on its balance sheet. The firm, which owes over $4.8 billion to its users alone, is trying to find liquidity to repay creditors. 

Its native token, CEL, now trades for more than double its two-year lows recorded after it locked accounts in early June, but still 65% below its price at the start of the year.

Celsius considers its bitcoin mining business key to its restructuring efforts, it said in a recent filing, believing it could generate revenue for the future and for loan repayments.

The lender projected to generate 10,118 BTC ($243 million) in 2022 and 15,000 BTC ($361 million) in 2023 and claimed to own 80,850 bitcoin rigs with about 43,600 in operation. 

“The debtors [Celsius] should not be granted permission carte blanche to transfer and dispose of assets of the bankruptcy estate without oversight, and because of the substantial risk to creditors of the estate, should not be allowed to further hypothecate or invest mined bitcoin in an unstable and highly fluctuating market,” the board wrote.

Texas is one of at least five states that opened investigations into Celsius shortly after it froze customer funds.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Bain Capital Crypto and Haun Ventures co-led the round as demand grows for Bitcoin-denominated savings and annuities

by Blockworks /
article-image

NYSE owner’s investment values the prediction market at $8–9 billion, signaling Wall Street’s entry into event-based trading

by Blockworks /
article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /
article-image

Staking levels in the ether funds will depend on protocol unstaking queue times and anticipated redemption activity, firm says

article-image

ETF inflows, miner strength, and tightening supply drive Bitcoin past its prior peak amid renewed demand for scarce assets

by Blockworks /
article-image

The Guidestar team, led by Alex Nezlobin, will join Uniswap Labs to enhance automated market maker design and smart order routing

by Blockworks /