Posted on

Celsius Fights To Reclaim $2 Billion Withdrawn Prior To Bankruptcy Declaration

According to a Bloomberg report, Celsius Network, the crypto platform that filed for bankruptcy in July 2022, demands that major customers who collectively withdrew over $2 billion before the bankruptcy return those funds to avoid potential litigation. 

An oversight committee formed during Celsius’s Chapter 11 case has begun contacting customers who withdrew more than $100,000 during the period leading up to the company’s bankruptcy filing. This recovery effort aims to repay creditors who did not withdraw funds from Celsius. 

Settlement Offered To Celsius Users 

Per the report, the oversight committee’s recovery process will impact around 2% of Celsius users who, in total, withdrew approximately 40% of the platform’s assets within the 90 days preceding the Chapter 11 filing. 

Celsius reported $6 billion in assets, 1.7 million registered users, and 300,000 active users with account balances exceeding $100 at the time of bankruptcy. 

Notably, the oversight committee has offered customers who may face clawback suits a settlement option, providing them with a “favorable rate” if they choose to settle. 

Customers who opt for settlement would have their potential liabilities determined based on the value of their assets at the time of their 2022 withdrawals. This means that settling customers would retain any appreciation in the value of their digital assets resulting from the surge in crypto prices over the past year.

Legal Consequences If Settlement Offer Is Declined

According to Bloomberg, customers who decline to settle may be subject to significantly more liability through potential litigation. The committee’s letter warns customers about the potential consequences of not accepting the settlement offer.

In November, a bankruptcy judge approved Celsius’ plan to distribute billions of dollars in assets and transform into a creditor-owned Bitcoin mining firm. According to a court filing by the company’s lawyers, Celsius has already distributed around $2 billion in assets.

Overall, Celsius Network’s oversight committee is pursuing the recovery of over $2 billion in withdrawals made by major customers shortly before the company filed for bankruptcy. By offering settlement options based on the value of assets at the time of withdrawal, Celsius aims to alleviate potential litigation and expedite the repayment of creditors. 

As the process unfolds, impacted customers decide to settle potential liabilities or face potential litigation with potentially higher consequences.

Celsius

Currently, the network’s native token, CEL, is trading at $0.1862, reflecting a significant year-to-date decline of over 49%.

In shorter time frames, the token has experienced a 12% decline in the last 24 hours, a 32% decline in the last week, and a 27% decline in the last fourteen days, highlighting the limited interest and lack of confidence among investors in the CEL token.

Featured image from Shutterstock, chart from TradingView.com 

Posted on

Empty Accounts Discovered As Celsius Allows Crypto Withdrawals For Eligible Users

In a recent announcement, bankrupt crypto lender Celsius has initiated additional withdrawals for certain eligible custody users. However, it’s important to note that only specific custody assets are currently available for withdrawal, while other cryptocurrencies such as Bitcoin (BTC) remain inaccessible. 

Starting November 29th, two groups, namely Class 6A General Custody Claims and Class 6B withdrawable custody claims, are eligible for withdrawals. Users within these groups have until February 28th to make their withdrawals. 

Qualifying users can withdraw 72.5% of their crypto, minus transaction fees, provided they did not participate in a previous custody settlement. 

Withdrawal Woes For Celsius Users

In the November 29 announcement, Celsius urged users to withdraw these assets from the Celsius app immediately and to keep personal records of relevant information, as the app will only be accessible for a limited time. 

However, despite the withdrawal option, some Celsius users have experienced difficulties, according to reports on the X platform. This development comes as some 58,300 users hold approximately $210 million worth of assets that have been deemed “custodial assets” by the court.

According to user responses to the Celsius announcement, there have been reports of login failures on the platform. Users claim to be experiencing errors even after attempting to reinstall the Celsius app. 

Additionally, some users have expressed concern that their Earn accounts are empty, further exacerbating the issues faced by former users of the crypto lending platform. One user specifically stated: 

While my frozen portfolio balance is visible, my custody balance shows 0.

Transition To ‘Creditor-Owned’ Bitcoin Mining Company

As reported by our sister website, Bitcoinist Celsius recently obtained approval from the bankruptcy court for its proposal to transition into a creditor-owned Bitcoin mining company. 

This plan involves repaying customers through a combination of crypto assets and stock in the newly established Bitcoin mining firm, which will be publicly listed.

The distribution of assets is expected to commence in early 2024, pending endorsement from the US Securities and Exchange Commission (SEC). However, Celsius acknowledges the possibility of liquidation if the crypto-mining proposal fails to materialize.

Celsius and its founder and CEO, Alex Mashinsky, have faced legal action from various entities, including the SEC, Federal Trade Commission (FTC), and the Commodity Futures Trading Commission (CFTC), for alleged misleading practices. 

Celsius promptly settled with the FTC, agreeing to pay $4.7 billion once the bankruptcy proceedings concluded. Mashinsky has been charged with fraud; his criminal trial is scheduled this year. 

Overall, the resolution of the reported issues faced by Celsius users remains uncertain, including the login difficulties and accounts displaying zero balances. 

It is yet to be determined whether these occurrences are temporary or persistent and how the platform intends to address them. The future actions and measures Celsius took to rectify these concerns are still to be clarified.

Celsius

The lender’s native token, CEL, is trading at $0.2533, up 5% in the past 24 hours. However, it is important to note that the token has yet to recover from its 2022 decline and remains down more than 50% year-to-date.

Featured image from Shutterstock, chart from TradingView.com

Posted on

Empty Accounts Discovered As Celsius Allows Crypto Withdrawals For Eligible Users

In a recent announcement, bankrupt crypto lender Celsius has initiated additional withdrawals for certain eligible custody users. However, it’s important to note that only specific custody assets are currently available for withdrawal, while other cryptocurrencies such as Bitcoin (BTC) remain inaccessible. 

Starting November 29th, two groups, namely Class 6A General Custody Claims and Class 6B withdrawable custody claims, are eligible for withdrawals. Users within these groups have until February 28th to make their withdrawals. 

Qualifying users can withdraw 72.5% of their crypto, minus transaction fees, provided they did not participate in a previous custody settlement. 

Withdrawal Woes For Celsius Users

In the November 29 announcement, Celsius urged users to withdraw these assets from the Celsius app immediately and to keep personal records of relevant information, as the app will only be accessible for a limited time. 

However, despite the withdrawal option, some Celsius users have experienced difficulties, according to reports on the X platform. This development comes as some 58,300 users hold approximately $210 million worth of assets that have been deemed “custodial assets” by the court.

According to user responses to the Celsius announcement, there have been reports of login failures on the platform. Users claim to be experiencing errors even after attempting to reinstall the Celsius app. 

Additionally, some users have expressed concern that their Earn accounts are empty, further exacerbating the issues faced by former users of the crypto lending platform. One user specifically stated: 

While my frozen portfolio balance is visible, my custody balance shows 0.

Transition To ‘Creditor-Owned’ Bitcoin Mining Company

As reported by our sister website, Bitcoinist Celsius recently obtained approval from the bankruptcy court for its proposal to transition into a creditor-owned Bitcoin mining company. 

This plan involves repaying customers through a combination of crypto assets and stock in the newly established Bitcoin mining firm, which will be publicly listed.

The distribution of assets is expected to commence in early 2024, pending endorsement from the US Securities and Exchange Commission (SEC). However, Celsius acknowledges the possibility of liquidation if the crypto-mining proposal fails to materialize.

Celsius and its founder and CEO, Alex Mashinsky, have faced legal action from various entities, including the SEC, Federal Trade Commission (FTC), and the Commodity Futures Trading Commission (CFTC), for alleged misleading practices. 

Celsius promptly settled with the FTC, agreeing to pay $4.7 billion once the bankruptcy proceedings concluded. Mashinsky has been charged with fraud; his criminal trial is scheduled this year. 

Overall, the resolution of the reported issues faced by Celsius users remains uncertain, including the login difficulties and accounts displaying zero balances. 

It is yet to be determined whether these occurrences are temporary or persistent and how the platform intends to address them. The future actions and measures Celsius took to rectify these concerns are still to be clarified.

Celsius

The lender’s native token, CEL, is trading at $0.2533, up 5% in the past 24 hours. However, it is important to note that the token has yet to recover from its 2022 decline and remains down more than 50% year-to-date.

Featured image from Shutterstock, chart from TradingView.com

Posted on

Empty Accounts Discovered As Celsius Allows Crypto Withdrawals For Eligible Users

In a recent announcement, bankrupt crypto lender Celsius has initiated additional withdrawals for certain eligible custody users. However, it’s important to note that only specific custody assets are currently available for withdrawal, while other cryptocurrencies such as Bitcoin (BTC) remain inaccessible. 

Starting November 29th, two groups, namely Class 6A General Custody Claims and Class 6B withdrawable custody claims, are eligible for withdrawals. Users within these groups have until February 28th to make their withdrawals. 

Qualifying users can withdraw 72.5% of their crypto, minus transaction fees, provided they did not participate in a previous custody settlement. 

Withdrawal Woes For Celsius Users

In the November 29 announcement, Celsius urged users to withdraw these assets from the Celsius app immediately and to keep personal records of relevant information, as the app will only be accessible for a limited time. 

However, despite the withdrawal option, some Celsius users have experienced difficulties, according to reports on the X platform. This development comes as some 58,300 users hold approximately $210 million worth of assets that have been deemed “custodial assets” by the court.

According to user responses to the Celsius announcement, there have been reports of login failures on the platform. Users claim to be experiencing errors even after attempting to reinstall the Celsius app. 

Additionally, some users have expressed concern that their Earn accounts are empty, further exacerbating the issues faced by former users of the crypto lending platform. One user specifically stated: 

While my frozen portfolio balance is visible, my custody balance shows 0.

Transition To ‘Creditor-Owned’ Bitcoin Mining Company

As reported by our sister website, Bitcoinist Celsius recently obtained approval from the bankruptcy court for its proposal to transition into a creditor-owned Bitcoin mining company. 

This plan involves repaying customers through a combination of crypto assets and stock in the newly established Bitcoin mining firm, which will be publicly listed.

The distribution of assets is expected to commence in early 2024, pending endorsement from the US Securities and Exchange Commission (SEC). However, Celsius acknowledges the possibility of liquidation if the crypto-mining proposal fails to materialize.

Celsius and its founder and CEO, Alex Mashinsky, have faced legal action from various entities, including the SEC, Federal Trade Commission (FTC), and the Commodity Futures Trading Commission (CFTC), for alleged misleading practices. 

Celsius promptly settled with the FTC, agreeing to pay $4.7 billion once the bankruptcy proceedings concluded. Mashinsky has been charged with fraud; his criminal trial is scheduled this year. 

Overall, the resolution of the reported issues faced by Celsius users remains uncertain, including the login difficulties and accounts displaying zero balances. 

It is yet to be determined whether these occurrences are temporary or persistent and how the platform intends to address them. The future actions and measures Celsius took to rectify these concerns are still to be clarified.

Celsius

The lender’s native token, CEL, is trading at $0.2533, up 5% in the past 24 hours. However, it is important to note that the token has yet to recover from its 2022 decline and remains down more than 50% year-to-date.

Featured image from Shutterstock, chart from TradingView.com

Posted on

Celsius Network’s Shift Towards Bitcoin Mining Plan

Bankrupt crypto lender Celsius Network has revealed that the company planning on switching to a Bitcoin mining-only company, following its bankruptcy court’s confirmation of the plan.

Celsius Transition To Mining NewCo

Celsius Network‘s transition into a mining company coincides with its bankruptcy proceedings. Over the past year, the digital assets company has experienced financial challenges, which led to its bankruptcy filing.

In September, Celsius filed for a reimbursement plan as its bankruptcy plan to resolve the financial challenges in the company. This saw over 95% of Celsius’ creditors voting in favor of this reimbursement plan.

According to the recent court filing, the cryptocurrency company intends to convert its services into Bitcoin mining operations exclusively and the new company will be known as Mining NewCo.

In addition, the company seems to have forsaken its initial plan for the company’s future with Fahrenheit Group. The firm asserted that the transition was the primary business of the new company to be formed with Fahrenheit, LLC. 

This was the core business of the new company that was proposed to be created with Fahrenheit, LLC that was described in the Plan (the “Fahrenheit NewCo”).

The new company which was supposed to be known as Fahrenheit NewCo was formed after it purchased Celsius this year after it purchased Celsius in a bidding war.

Celsius and the Fahrenheit Group initially came to a deal that the group would provide the firm with funds and operational expertise. Fahrenheit successfully acquired the firm’s assets this year. 

In the meantime, the firm is in touch with certain parties in order to organize the management of the Bitcoin mining company.

Celsius

The SEC’s Imparted The Transition Move

The firm’s plan to switch to a Bitcoin mining company was triggered by the United States Securities and Exchange Commission’s (SEC) feedback after the court confirmed its plan. The company also highlighted that the new mining company will be owned by its customers.

The filing stated:

Celsius received feedback from the Securities and Exchange Commission (the “SEC”) on certain aspects of the Plan, which has resulted in Celsius now intending to begin the process to apply to register the shares in a new publicly traded Bitcoin mining company that will be owned by Celsius customers (the “Mining NewCo”).

Additionally, the feedback seems to have also imparted the initial plan of transferring the firm’s assets to the Fahrenheit Group. As noted in the filing, Celsius estates will retain certain of the assets in order to be monetized by the plan administrator. 

However, based on the SEC’s feedback, the Debtors, in consultation with the Official Committee of Unsecured Creditors (the “Committee”), have determined that certain of the assets that were to be transferred to the Fahrenheit NewCo must, for regulatory reasons, be retained by Celsius’s estates to be administered and monetized by the Plan Administrator and/or Litigation Administrator for the benefit of creditors.

Posted on

Why Celsius Investors Don’t Seem Upbeat Despite CEL Rallying 30%

Celsius (CEL) has been on the headlines recently in line with hearing updates following its filing of bankruptcy and sale of stablecoins.

  • CEL price spikes 30% as seen in the past 24 hours
  • Price slumps 13.21% despite improvement in social media metrics
  • ETH Merge to impact CEL performance

Celsius Network has recently filed for bankruptcy in July and is now in Chapter 11 proceedings. More so, the network has also requested for court authorization on its plans to dispose its stablecoins to pump up liquidity needed for its operations.

Once this is approved by Martin Glenn, the U.S. presiding judge, the money pooled from the sale of stablecoins would serve as funding for Celsius operations.

The said hearing on the sale of stablecoins is set on October 6 in New York.

Agreement To Appoint An Independent Examiner

In September, The U.S. Trustee’s office together with Celsius’ committee consisting of creditors made an agreement to assign an independent examiner with the condition that they will restrict both the funding and time allotted to the examiner.

More so, the United States Trustee’s Office will be in charge of choosing the examiner. The judge has approved this on Wednesday.

In this connection, Celsius has recently posted a tweet on September 15 harping on their willingness to continue working with the U.S. Trustee and Unsecured Creditors Committee as well as their commitment to improve network efficiency in order to serve their customers better.

CEL Price Down 13.21% Despite Increase In Metrics

Triggered by the recent developments and hearing events, CEL price is observed to have spiked by 30% as seen in the past 24 hours. More so, CEL social media metrics has also accelerated.

Social media engagement also peaked at 1.2 billion showing a remarkable growth of 32.26%. 

Despite the boost in social media engagement as well as a price rally, there are still some nagging issues surrounding CEL that make investors apprehensive about the altcoin.

According to CoinMarketCap, CEL price has nosedived by 13.21% or trading at $1.70 as of this writing. 

The total market cap of CEL has slumped by 36.21% as seen in August. More so, market dominance also declined by as much as 41.25%. Uncertainty is creeping on the token, and investors are being extra cautious in making any move due to its high volatility.

The Ethereum merge also has a great impact on CEL performance. In fact, Celsius has posted a tweet stating that they are tracking the merge.

Investors also look at the short-squeeze movement as a warning because history shows that this movement can negatively impact investor portfolios.

Crypto total market cap at $927 trillion on the daily chart | Source: TradingView.com

Featured image from LedgerInsights, Chart: TradingView.com

Posted on

CEL Rallies To $2 As Bankruptcy Proceedings Continue, But Rally May Just Be Starting

Celsius (CEL) has been rallying in recent times. The native token of the now bankrupt Celsius Network had taken a nosedive when the company had first filed for bankruptcy, but it seems the time is changing with the recent recovery. As Celsius continues with its proceedings, the price of CEL has shot up over the last week, reaching as high as $2.

What Is Behind CEL Recovery?

The recovery in CEL’s price has obviously come as a surprise to the market. The altcoin had struggled tremendously before finding its footing once more. But the rally that followed has exceeded expectations on all fronts. After struggling below $1 for the better part of last month, the digital asset has now found some much-needed reprieve.

CEL’s price soared about 50% in the last 7 days alone, causing it to touch as high as $2 in the early hours of Tuesday. It has since retraced back down to around $1.80, but the bull trend continues to hold and has triggered speculations around what was causing the increase in price.

However, the reason behind the CEL run-up is a simple one of supply and demand. Since Celsius had begun bankruptcy proceedings, it has locked up a large amount of crypto on its platform. Now, the majority of that crypto was being held on the exchange to earn CEL rewards, which is how new supply was introduced into the market. Since all of the cryptos are now frozen, CEL inclusive, and there is no new supply being pumped into the market, it has led to a supply squeeze.

CEL price at $1.85 | Source: CELUSD on TradingView.com

Simply put, there is now more demand for CEL than there is supply. Celsius is not allowed to put new tokens into the market, which means that the only available tokens are the supply currently in the market. Short sellers are also being forced to close their positions, else, they lose a lot of money in the short squeeze, leaving only the long-term traders and CEL bulls to dominate the market.

This singular reason alone has rewritten a bullish part for the digital asset. Bankruptcy proceedings are known to take years, an example is the Mt Gox case, and with most liquid CEL supply being frozen on the platform for years, it is expected that this will be a prolonged short squeeze.

However, not a lot of optimistic price predictions are now emerging for the altcoin due to this reason. Price Estimates from Coinmarketcap show that investors expect the digital asset to hit as low as $0.77 in the month of September.

Featured image from The Coin Republic, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Posted on

CEL Token Seen Making A Recovery Despite Celsius Going Bankrupt

Celsius (CEL) is currently witnessing a mid-crisis bounce. After registering for bankruptcy protection in the face of various probes, the token’s value transcended pressure and increased by more than 25 percent on Saturday.

Despite the present efforts of its management, the Celsius Network token is exhibiting indications of a revival, according to certain observers. In the past 24 hours, the price of a CEL has increased by approximately 80 percent.

CEL Up 30% – Bullish Run In The Offing?

CEL was trading at $0.73 at the time of writing, a 30 percent rise over its July 15 closing price.

Faced with skepticism and a growing number of withdrawal stoppage, CEL’s price soared from $0.64 to $1.53 on June 19 and June 20.

Celsius filed for Chapter 11 bankruptcy late Wednesday in the U.S. Bankruptcy Court for the Southern District of New York. Last month, the company halted withdrawals, swaps, and transfers on its platform, claiming “extreme market volatility.”

Suggested Reading | ApeCoin Performance Lags Behind Other Altcoins – Here’s What Happened To APE

The worldwide cryptocurrency market capitalization was trading at $928 billion, up more than 3% in the previous 24 hours. The total trading volume of cryptocurrencies increased almost 3% to $77 billion.

The suspension of withdrawals by Celsius Network last month pushed the cryptocurrency market into a gloomy pit, as its bankruptcy petition revealed $1.2 billion in faulty agreements.

This includes the liquidation of $840 million in Tether debt, $750 million worth of mining hardware, and the loss of 38,000 ETH because of staking.

In addition, it has $411 million in outstanding loans to retail customers, secured by digital assets valued at $765 million.

BTC total market cap at $397 billion on the weekend chart | Source: TradingView.com
CEL Seeing Steady Ascent

The price rally of CEL appears to be quite typical, with the token witnessing steady climbs and dips over the previous 30 days. On June 21, CEL peaked at $1.53 per token before rapidly reversing course.

Meanwhile, since Celsius began repaying its financial obligations last week, on-chain analysis of CEL has showed steady accumulation, according to data from Santiment. Outside of established exchanges, the quantity of CEL tokens has increased by 0.5 percent during the past three days.

Suggested Reading | Avalanche Notches Solid Mid-Week Bounce – Can AVAX Sustain The Positive Noise?

Likewise, the volume of Celsius has been increasing recently. The CEL volume was 18 million in the early morning hours of July 15. At press time, the same volume stood at 66 million. The variation in volume is indicative of fluctuating investor sentiment.

The price of Celsius’ CEL cryptocurrency is increasing as a result of short sellers unloading CEL tokens on exchanges. Coinglass has reported that exchanges including Okex, FTX, and Huobi are experiencing short positions of more than 80 percent.

Featured image from HowStuffWorks, chart from TradingView.com

Posted on

CEL Token Price Plummets 50% As Celsius Goes Bankrupt

After the Celsius Network’s decision last month to freeze all transactions and withdrawals, the whole cryptocurrency market plummeted into a deep and gloomy sinkhole.

This week there was some good news, when Celsius paid off its remaining $41.2 million debt to the DeFi protocol MakerDAO. This payment allowed Celsius to release $448 million in collateral.

However, it appears that this will be the only positive development from the U.S. crypto lender in the coming days or months.

After weeks of conjecture and hearsay, Celsius’s legal counsels have formally informed regulators that the cryptocurrency lender has filed for Chapter 11 bankruptcy protection.

Suggested Reading | Loopring Wobbles In Last 2 Months – Can LRC Stay In The Loop?

CEL Loses Half Its Value After Bankruptcy News

Following the disclosure of bankruptcy, CEL, the native cryptocurrency of Celsius Networks, lost half of its value from its intraday high of 95 cents and down to 45 cents.

In the last month, there has been an increase in the number of cryptocurrency-related failures. After the crypto hedge fund Three Arrows Capital and the crypto lender Voyager Digital, Celsius becomes another domino to fall in the bankruptcy abyss.

Since June 20, the price of CEL has nearly grown four-fold due to what appears to be a fervor caused by futures and derivatives traders. CEL rose from $0.28 on June 15 to $1.56 on June 21, a 456 percent increase compared to the market’s 12.36 percent increase during the same timeframe.

In May, Celsius had only $12 billion in assets, which was about half of what it had at the start of the year. After that, the firm ceased revealing its assets under management (AUM).

Suggested Reading | Ethereum (ETH) Continues To Lose Luster, Drops Below $1,100 Support

BTC total market cap at $378 billion on the daily chart | Source: TradingView.com
Celsius Was A Crypto Industry Powerhouse

CEL remains under pressure to the downside as it trades roughly 80% below its April 2018 high of $8.

At its prime, Celsius was a cryptocurrency industry titan. It had more than 1.7 million users worldwide and assets of more than $20 billion. The company achieved success as a result of offering investors yields in the range of 18 percent.

What then happens to the CEL token? The value of CEL has decreased significantly since Celsius ceased operations. This does not, however, imply that the token will plunge to zero. Indeed, it could garner renewed attention from pump-and-dump traders.

Meanwhile, Celsius asserts that it has $167 million in ready cash, which will be used to support some operations “during the reorganization process.”

Featured image from CoinQuora, chart from TradingView.com