Court Offers Solution to Customers of Celsius Network
Following efforts by the Celsius custody account holders to recover their funds, a United States Bankruptcy Judge Martin Gleen on March 21 ruled that customers will be able to receive 72.5% of their crypto holdings.
Gleen further declared that Celsius customers cannot pursue any litigation, including seeking relief from the automatic stay or causes of actions against the crypto lending platform Celsius Network.
The new judgement will serve as a settlement plan between Celsius Network and its custody account holders. Meanwhile, the judgement needs to be approved by the majority of the users before coming into effect.
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).
— Cam Crews (@camcrews) March 21, 2023
However, the settlement plan directly concerns major stakeholders in the lending platform’s case, including the committee of unsecured creditors, Celsius debtors, and an adhoc group of account holders.
Recall that Celsius announced earlier in February that NovaWulf Digital Management would serve as a sponsor for its restructuring plan, which would lead to the repayment of 85% of Celsius customers.
Meanwhile, Judge Gleen affirmed in Jan. that more than $5 billion in funds from Celsius Earn program belonged to the lending platform. As a result, a December ruling mandated the platform to return $44 million in crypto.
Later on, Judge Gleen ordered Celsius debtors to sell $7.4 million worth of Bitmain coupons as a means to raise funds.
Controversy Over Celsius’ Restoration of Withdrawal
On March 3, a number of customers of erstwhile bankrupt crypto lender Celsius celebrated the restoration of withdrawal option after 263 days of freezing funds due to bankruptcy. Although some disputed that they were unable to make withdrawal.
In light of the new development and court ruling, it is clear that not all customers have been able to receive at least 70% of their crypto holdings.
Meanwhile, customers of the crypto lender struggling to recover their funds were once attacked by a phishing attempt, which was strongly denied by Celsius.
It is hoped that the new settlement plan will be approved by all stakeholders in order to facilitate prompt repayment of customers.