A San Francisco-based company, CTN Holdings, which specialized in the sale of carbon credits and was an offshoot of digital bank Aspiration, has recently filed for Chapter 11 bankruptcy protection. The firm is reportedly burdened with approximately $170 million in outstanding debt and a net operating loss of $580 million for federal tax purposes. Founded by Andrei Cherney and Joe Sanberg, Aspiration initially started as an eco-friendly digital bank but later pivoted its focus towards carbon credit sales after facing slowed growth.
CTN's financial challenges were exacerbated by the arrest of co-founder Joe Sanberg in early March 2025 on allegations of defrauding investors. Despite these setbacks, the company aims to auction its assets within the next 45 days to repay creditors. Notably, CTN’s largest creditors include entities owned by billionaire Steve Ballmer, such as the L.A. Clippers and Forum Entertainment.
The Evolution of Aspiration and CTN's Carbon Credit Venture
Aspiration, established in 2013, initially carved out a niche as an environmentally-conscious digital bank offering consumer accounts and green investment opportunities. Achieving a peak valuation of $2.3 billion in 2021, it attracted high-profile backers like Steve Ballmer, Leonardo DiCaprio, and Drake. However, as its digital banking segment struggled to maintain growth momentum, the organization made a strategic shift towards selling carbon credits. This transition was marked by partnerships with prominent clients like Meta and the L.A. Clippers.
This pivot was driven by the growing demand for companies to offset their environmental impact through initiatives that reduce atmospheric carbon levels. By facilitating projects such as reforestation efforts, CTN aimed to help businesses mitigate their ecological footprint. The rationale behind carbon credits lies in enabling organizations to compensate for their environmental damage by funding activities designed to remove carbon dioxide from the atmosphere. This innovative approach allowed CTN to establish itself as a key player in the burgeoning carbon credit market, despite originating from a seemingly unrelated sector.
Financial Woes and Legal Challenges Leading to Bankruptcy
Despite initial success, CTN encountered significant financial hurdles leading up to its recent bankruptcy filing. A pivotal moment occurred when co-founder Joe Sanberg faced legal issues in early March 2025. Accused of conspiring to defraud investors of at least $145 million via loans secured against his shares in CTN, Sanberg's arrest triggered a cessation of funding from associated entities. Consequently, CTN found itself struggling to secure adequate capital to sustain operations, ultimately resulting in its decision to file for Chapter 11 bankruptcy protection.
According to court filings, CTN executives were unaware of Sanberg’s alleged fraudulent activities. Subsequent investigations confirmed that Sanberg no longer holds any positions or roles within the company and is entirely disengaged from its operational framework. Under the guidance of Miles Staglik, appointed as chief restructuring officer, CTN plans to liquidate its assets over the next 45 days to address creditor obligations. Major creditors include Steve Ballmer's ventures, the L.A. Clippers and Forum Entertainment, along with other notable entities such as the Boston Red Sox and various fintech firms. Meanwhile, Mission Financial Partners acquired the Aspiration digital banking brand in a licensing spinoff, ensuring that Aspiration’s green financial products remain unaffected by CTN's legal and financial predicaments.