CTN Holdings files for bankruptcy amid massive debts and celebrity backers

In the United States, CTN Holdings, a startup based in San Francisco and associated with the digital bank Aspiration, has filed for Chapter 11 bankruptcy protection as of April 1, 2025. The company, which specializes in selling carbon credits, reported an accumulated net operating loss of $580 million for federal tax purposes and an estimated $170 million in outstanding debt. At its peak in 2021, CTN reached a valuation of $2.3 billion and attracted investment from high-profile individuals including billionaire Steve Ballmer, actor Leonardo DiCaprio, and musician Drake. As the growth of its digital banking services slowed, CTN shifted its focus to selling carbon credits to companies seeking to mitigate their environmental impact. Key customers included the L.A. Clippers, owned by Ballmer, and Meta. In early March 2025, however, CTN faced a crisis when cofounder Joe Sanberg was arrested on charges related to investor fraud. Sanberg allegedly conspired to defraud investors of at least $145 million, which caused affiliates previously funding CTN to withdraw support, leading to financial instability. The bankruptcy filing indicates that CTN plans to auction its assets in the coming 45 days to repay creditors, with significant debts owed to the L.A. Clippers ($30 million) and Forum Entertainment ($11 million). Other creditors include the Boston Red Sox and fintech firms such as Socure and Feedzai, exacerbating the financial strain on the company. The situation highlights the challenges faced by startups in the climate tech sector amid changing market conditions and personal misconduct of key figures. Aspiration has distanced itself from CTN, assuring stakeholders that its financial products remain unaffected by CTN's legal troubles. CTN's downfall casts a shadow over its ambitious goals in environmental sustainability and raises questions about the viability of such startups in the competitive fintech and green technology spaces. As bankruptcy proceedings unfold, the future of CTN and its contributions to the carbon credit market remain uncertain, reflecting broader challenges faced by entrepreneurial ventures in achieving sustainable business models while navigating legal and financial complexities.