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Celsius Fights To Reclaim $2 Billion Withdrawn Prior To Bankruptcy Declaration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

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Celsius Follows FTX As It Begins Repaying Crypto To Creditors, Here’s How Much

Bankrupt cryptocurrency lending company Celsius Network has followed behind FTX, revealing plans to disburse billions of dollars in crypto to creditors and establish a new Bitcoin mining company for its creditors. 

Celsius To Distribute $3 Billion In Crypto To Creditors

In a press release published on Wednesday, Celsius Network announced its successful emergence from bankruptcy. The company is now set to implement its “plan of reorganization,” which involves distributing over $3 billion in crypto assets and fiat currency to its creditors. 

The crypto lending company claimed that the reorganization plan has gained approval by approximately 98% of the company’s account holders. Additionally, Celsius disclosed that the plan has been confirmed and accepted by the Bankruptcy Court of the New York Southern District and the United States Securities and Exchange Commission (SEC). 

Earlier in 2022, Celsius filed for bankruptcy in New York after becoming one of the many victims of the crypto market’s dramatic plunge which saw major token prices falling to new lows. Subsequently, the crypto lending platform froze all withdrawals, temporarily shutting off account holder’s access to their savings and funds. 

Now, 18 months after halting withdrawals, Celsius is finally settled and has initiated steps to reimburse creditors. The crypto lending platform disclosed plans to boost its cryptocurrency distribution to creditors by almost $250 million. This would involve converting altcoins to Bitcoin (BTC) and Ethereum (ETH). 

“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” Members of the Special Committee of the Board of Celsius, David Barse and Alan Carr stated. 

The conclusion of the long-awaited repayment and the company’s reorganization plans marks a milestone for Celsius as it reflects the organization’s commitment to its creditors. It also underscores its compliance with regulatory obligations and resolvement of intricate legal issues within its business. 

Celsius Network CEL price chart from Tradingview.com (FTX Crypto)

Celsius Forges Ahead With Creation Of New Bitcoin Mining Company

As Celsius works to disburse $3 billion to its creditors, the crypto lending platform has also announced plans to create a new Bitcoin mining company, Ionic Digital, Inc. The Bitcoin mining company will be owned by Celsius creditors, and mining operations will be managed by Hut 8 Corp, a North American digital asset mining company. 

The objective of the Bitcoin mining company is to consistently provide recoveries to creditors and ensure that the best outcomes are guaranteed for them. After gaining the necessary requisite approvals, Ionic Digital stocks are expected to be publicly traded. Certain shares of the Bitcoin mining company have already been allocated to Celsius creditors.  

Additionally, the Chief Commercial Officer (CCO) of Hut 8, Matt Prusak, will assume the role of Chief Executive Officer (CEO) at Ionic Digital. The publication revealed that he will be working with Celsius’s board of directors appointed by the Official Committee of Unsecured Creditors (UCC).

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Celsius Seeks Repayment: Creditors Urged To Return 27.5% Of Funds

Surprisingly, bankrupt crypto lender Celsius Network customers are now facing legal action from bankruptcy managers after making substantial withdrawals within 90 days before the company’s bankruptcy declaration. 

The bankruptcy managers have demanded that affected customers return some of their funds or potentially face further legal consequences.

Customers Face Celsius Network’s Settlement Demands

The filing, published on Tuesday, revealed that customers who withdrew over $100,000 within the specified 90-day period before July 12, 2022, find themselves at the center of the legal dispute. 

These customers have been notified through an official filing outlining the procedures for settling their withdrawal preference exposure.

Withdrawal preference exposure noted in the notice refers to the aggregate value of assets withdrawn by customers from the Celsius Network platform during the specified period, minus any subsequent deposits made after the first withdrawal. 

The bankruptcy managers have determined that customers with withdrawal preference exposure greater than $100,000 must settle their claims or obtain a court order ruling to avoid potential liability.

The bankruptcy plan, known as the Modified Joint Chapter 11 Plan of Reorganization of Celsius Network LLC and Its Debtor Affiliates, offers an Account Holder Avoidance Action Settlement. 

Under this settlement, the Debtors will release avoidance actions against account holders meeting certain criteria, including accepting the plan on all claims and providing a payment equal to 27.5% of their withdrawal preference exposure.

The distribution agent is not obligated to make distributions to account holders with unresolved withdrawal preference exposure until their claims are settled, a court rules in their favor, or the withdrawal preference exposure is resolved with the litigation administrator after the plan’s effective date.

Settle Now Or Face Consequences

Celsius Network, in collaboration with the committee, has extended the payment deadline to allow affected customers to settle their withdrawal preference exposure and receive a release of all avoidance actions. The plan’s effective date is anticipated to occur around January 31, 2024.

Customers wishing to make the settlement payment must also submit the election form by January 25, 2024. The Debtors will start accepting completed election forms on January 17, 2024. Failure to submit the form may result in the rejection of the settlement payment.

It is important to note that failure to settle withdrawal preference exposure by January 31, 2024, may lead to further correspondence or actions by the litigation administrator after the plan’s effective date.

As customers grapple with the unexpected legal action, the crypto community awaits further developments in this ongoing bankruptcy case. 

The Account Holder Avoidance Action Settlement outcome will shed light on resolving withdrawal preference exposure claims and the subsequent distribution of funds.

Celsius

Featured image from Shutterstock, chart from TradingView.com 

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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

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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

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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

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Celsius Commits To Massive Crypto Repayment: $2 Billion To Creditors By 2023’s End

Celsius Network, a bankrupt digital asset lender, has revealed plans to begin repaying creditors using billions of dollars in crypto assets before the year’s end. 

The company presented a restructuring plan, outlined in a recent filing to a US bankruptcy court, which aims to generate funds for a new corporate spinoff known as “NewCo” and facilitate customer repayments.

Celsius Vows To Clear $2 Billion Debt

According to the filing, the plan outlines a distribution of at least $2.03 billion in cryptocurrency to creditors, with the actual amount subject to fluctuations in the cryptocurrency market. 

This distribution will occur as soon as reasonably practicable after the plan becomes effective, either through the NewCo transaction or an orderly wind down. The NewCo transaction, sponsored by the Fahrenheit Group, is a key component of the plan. 

It involves the creation of a new cryptocurrency company owned by customers, focusing on Bitcoin mining and staking. NewCo, which aims to maximize liquidity by listing on NASDAQ, will be managed by experienced crypto-native operators from Fahrenheit. 

The group has committed to injecting up to $50 million as an equity stake in NewCo, aligning the interests of Fahrenheit and creditors who will own shares in the new company.

In the event that the NewCo transaction cannot be completed, the plan includes an orderly wind-down option that would provide creditors with better recoveries compared to a Chapter 7 liquidation.

Celsius’s legal representative, Christopher S. Koenig, also revealed that the restructured company, expected to emerge from Chapter 11, will receive $450 million in capital and financial backing. 

However, the focus remains on the successful execution of the NewCo transaction, which would mark a significant milestone as the first revival of a failed crypto platform under Chapter 11, following the industry’s wave of insolvencies last year.

While the approval of Celsius’s plan is under deliberation by Judge Martin Glenn, some customers who have been unable to access their funds have expressed opposition. 

Additionally, an affiliate of Lantern Ventures owed approximately $82 million, has challenged the plan, claiming overvaluation of the new business by Celsius’s advisors. Clearance from securities regulators will also be necessary for the new venture.

It is important to note that if the new company were to fail, liquidation could become a possibility, potentially resulting in lower repayments for customers. 

Nonetheless, Celsius Network’s proposed plan represents a significant effort to repay creditors and potentially revitalize the company, providing hope for both the cryptocurrency industry and affected stakeholders.

Celsius

At present, the native token of the company, CEL, is trading at $0.1535, reflecting a 1.1% decline over the past 24 hours. However, it is noteworthy that the token has experienced a notable upward trend in the last 30 days, exhibiting a substantial surge of over 21% during this period.

Featured image from Shutterstock, chart from TradingView.com

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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

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