Bloomberg: Celsius will refund $44 million in cryptocurrencies to custodial account holders

A U.S. bankruptcy court has granted the petition of a group of custodial account holders of cryptolanding platform Celsius Network to repay them $43.87 million in digital assets. Bloomberg writes about it.

The group filed the corresponding request in September.

According to the document for the court, as of the end of August 2022, Celsius has about 58,300 users who have collectively deposited and retained more than $210 million on the platform.

Of those, 15,680 customers deposited ~$43.87 million in assets into custodial accounts. At a past hearing, the court orally ordered the platform to return the funds to them.

Unlike Celsius customers using Earn or Borrow products, custodial account holders still retain ownership of their crypto assets. For them, the platform acted as a custodial intermediary. The legal assessment for customers of Earn or Borrow products has yet to be worked out.

The judge did not extend the order to the 22,580 customers who transferred funds from Earn or Borrow accounts to custodial accounts shortly before Celsius filed for bankruptcy. They account for $11.25 million in assets.

The platform can claim ownership of these funds because of rules related to so-called privileged transfers. The exceptions were transfers of less than $7500.

On June 13, the cryptocurrency lender suspended withdrawals, exchanges and transfers between accounts.

On July 14, Celsius and certain affiliates filed for insolvency under Chapter 11 of the U.S. Bankruptcy Code.

In October, a court approved a plan of proceeding to sell the firm’s assets.Recall that on Dec. 6, the firm’s top management filed a petition seeking approval to sell Stablecoin to provide operational liquidity.

Sasha Tanin

Editor with ten years of experience, managed to work for "Rolling Stone" and several other publications, created his own niche media.
Back to top button