Examiner Reveals Celsius' Poor Accounting Practice, Crypto Lender Used Software For Small-Medium Businesses

Celsius, the now-bankrupt cryptocurrency lending company, just like the bankrupt crypto empire FTX, was using the accounting software package Quickbooks to keep track of its finances, a practice frowned upon by many, considering that the company used to handle billions worth of investments.

The interesting information came from the report of a court-appointed examiner Tuesday, who disclosed that Celsius tracked its finances in 15 Quickbooks files and spectacularly failed to produce consolidated statements.

Examiner Shoba Pillay told the court in a report released on Jan. 31 that the crypto lending firm's accounting practice made it more challenging to assess its finances after it filed for bankruptcy since the software is "geared mainly toward small and medium-sized businesses."

The court-appointed examiner, who used to be a federal prosecutor and trial lawyer and has led complex and high-stakes internal and government-facing investigations, discovered that the "files produced by Celsius were not the original files used to prepare the consolidated financial statements."

She also said that "Celsius retroactively prepared consolidation files from its historical accounting records."

Pillay noted, "For example, several entries in the QuickBooks general ledger are dated as of the last day of the respective quarters but were not included in the balances on Celsius's summary financial statements."

The court-appointed examiner requested access to Celsius' Quickbooks account on Nov. 30 but was only granted access to the statements a week later, which based on Pillay's investigation, contain certain figures that do not line up.

As the examiner dug deeper into the crypto lender's finances, she found "significant discrepancies" between Celsius's account in Quickbooks and those used to create consolidated statements the company provided.

Celsius filed for bankruptcy in July 2022 after it stopped customer withdrawals just a month shy of the infamous crypto winter that hit the cryptocurrency market.

During its heyday, the crypto lending firm managed $11 billion worth of assets with approximately 1.7 million users.

The use of Quickbooks in keeping track of finances is popular among small and medium businesses but not in multi-billion dollar companies. But Celsius is not the first crypto company to use the said accounting software. Last year, following its spectacular collapse and after the bankruptcy court appointed John Ray III as its new CEO, it was uncovered that the crypto empire FTX also used Quickbooks.

"Nothing against QuickBooks. Very nice tool," Ray told the U.S. House Financial Services Committee in December. "It's not for a multibillion-dollar company," he added.