Bankrupt Crypto Lender Celsius Was Using QuickBooks for Its Accounting
Credits: The Street

Bankrupt Crypto Lender Celsius Was Using QuickBooks for Its Accounting

Bankrupt crypto lender Celsius used QuickBooks to log its finances just like FTX. The company went bust last July as the cryptocurrency market underwent a huge sell-off. According to an examiner’s report, Celsius’ tracked its finances in 15 QuickBooks files and failed to produce consolidated statements.

QuickBooks is an accounting software package developed and marketed by Intuit. First introduced in 1983, QuickBooks products are geared mainly toward small and medium-sized businesses and offer on-premises accounting applications as well as cloud-based versions that accept business payments, manage and pay bills, and payroll functions.

Crypto lender Celsius propped up its token, benefiting insiders -U.S.  bankruptcy examiner
Credits: Yahoo Finance

Analyzing the company’s transactions after it went bust became challenging, as QuickBooks is “primarily geared towards small and medium-sized businesses,” court-appointed examiner Shobha Pillai said.

QuickBooks is an accounting tool for small and medium-sized businesses, but not those with billions of dollars in revenue or assets under management like FTX or Celsius. The tool came into the limelight after FTX imploded, as its new CEO John Ray III revealed that the crypto exchange used it to run its multibillion-dollar business.

According to Pillai, Celsius’ tracked its finances in 15 QuickBooks files and failed to provide consolidated statements. Later, Pillai found “significant discrepancies” between account balances in Celsius’ QuickBooks files and used to create consolidated statements.

Celsius was one of many crypto trading desks to freeze customer withdrawals in June as the crypto market tanked to lows not seen since 2017. After paying down a mountain of Defi debt to reclaim its collateral, Celsius filed for bankruptcy the following month.

Bankrupt Crypto Lender Celsius
Credits: Bloomberg

Alex Mashinsky made numerous public claims that client assets at Celsius were safe prior to these events. The company also showcased its Earn program as the “safest place for your crypto,” a vault used by Celsius to trade customer funds and generate yield.

The examiner said it was especially difficult to evaluate finances at Celsius post-bankruptcy because it used QuickBooks as an accounting system. As Pillay explained, Quickbooks is “geared mainly toward small and medium-sized businesses,”

While Celsius maintained its accounting records across 15 separate QuickBooks files, the system was not programmed to prepare the “entity-level financial information into consolidated financial statements.” As such, Celsius had to prepare manually consolidated statements, but there were some discrepancies between these statements and what was downloaded from its QuickBooks account.