Crypto lending firm Celsius Networks reportedly inquired the US Bankruptcy Court for the Southern District of New York for greenlight to sell its stablecoin holdings. 

Specifically, this should allow the firm – who had ceased withdrawals in June and has been proceeding via Chapter 11 bankruptcy since July – to generate liquidity to assist with “fund the Debtors’ operations.”

A notice was submitted by the Celsius’ legal team from Kirkland & Ellis law firm on September 15th. A hearing where the court would accept or decline the motion will be held on Oct. 6.

As detailed in the filing, at the moment, the firm has possession over an equivalent sum of $23 million in on different stablecoins. If the selling is carried out, these funds would go to support Celsius’ current operations. 

“Section 363 of the Bankruptcy Code is designed to strike a balance between allowing a business to continue its daily operations without excessive court or creditor oversight and protecting secured creditors and others from dissipation of the estate’s assets.” Citing section 363 of the Bankruptcy Code, the filing claimed. 

Celsius recently submitted the filing for a motion, pledging to partially give back funds to customers. Nonetheless, it would be exclusively applicable to Custody and Withold Accounts and for custody assets with a value equivalent to $7,575 or less in value. 

The initiative reportedly reeled in backlash from numerous industry experts, as the limitation means that only $50 million out of $210 million could be released.

The pressure on Celsius keeps on increasing as on Aug. 31, an ad hoc group of 64 custodial account holders filed a complaint to recover their assets. The plaintiffs noted that Celsius has “not honored any withdrawals from any programs,” including custody services.

Per the complaint, that contradicts the “plain language of the debtors’ terms of use,” as they provide that title to custody assets “always remains with the user.”