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Celsius Fights To Reclaim $2 Billion Withdrawn Prior To Bankruptcy Declaration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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Ethereum Faces Market Tremors As Celsius Offloads $1 Billion in ETH

Ethereum (ETH) is about witnessing a potential sell-off worth $1 billion. This significant transaction is rooted in actions by Celsius, a bankrupt crypto lender. Reports from on-chain analyst Lookonchain indicate that Celsius initiated the transfer of 459,561 ETH, estimated to be worth around $1.014 billion, to various exchanges.

The breakdown of this large-scale distribution includes 297,454 ETH ($656.5 million) moved to Coinbase Prime, 146,507 ETH to Paxos Treasury, and smaller sums totaling 7,800 ETH ($17.2 million) sent to FalconX and Coinbase, respectively. Despite this transfer, Lookonchain disclosed that Celsius still maintains a reserve of 62,468 ETH, valued at roughly $139 million.

This significant transfer carries significant weight in the Ethereum market. It poses a challenge as it exerts considerable pressure on Ethereum’s price, with potential implications for broader market sentiment. Ethereum could see a significant plunge if the $1.014 billion worth of ETH is sold simultaneously.

Celsius’ Previous Ethereum Transactions

Celsius’ latest Ethereum transactions aren’t isolated events. LookonChain has previously spotted significant transfers linked to Celsius, including a deposit of 13,000 ETH ($30 million) on Coinbase and 2,200 ETH ($5 million) to FalconX.

While these moves indicate Celsius’ proactive strategy in managing its financial challenges, they also signal potential volatility for Ethereum’s market value.

Furthermore, Arkham Intelligence reports that between January 8 and January 12, Celsius liquidated over $125 million worth of Ethereum. The primary objective of these sales is to fulfill obligations to creditors.

Dune Analytics also highlighted the pattern of large-scale Ethereum redemptions, noting redemptions exceeding $1.6 billion. Since last year’s Shanghai update, this figure represents the highest Ethereum redemptions recorded.

As part of its bankruptcy proceedings, Celsius continues liquidating Ethereum holdings to pay off debts.

Ethereum’s Market Reaction

In the aftermath of Celsius’s Ethereum transactions, the asset has seen a nearly 10% decline in value over the past week, dropping from a high above $2,600 to around $2,186 yesterday. However, Ethereum has slightly recovered, rising by 2.2% in the past 24 hours, with a trading price of $2,258 at the time of writing.

Ethereum (ETH) price chart on TradingView.com

Amid these market developments, Michael van de Poppe, a renowned crypto analyst, has identified three key factors that could signal a bullish phase for ETH. A significant element is Bitcoin’s market behavior, often setting the tone for altcoins.

Van de Poppe notes that Bitcoin’s indications of bottoming out usually precede rallies in altcoins, suggesting a potential upturn for Ethereum. He also emphasizes the increasing excitement around spot Ethereum ETFs, which could catalyze Ethereum’s market value in the coming weeks.

Additionally, Ethereum’s impending network upgrades, which aim to reduce transaction costs significantly, are expected to enhance the network’s efficiency and scalability, potentially boosting its market appeal.

Featured image Unsplash, Chart from TradingView

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Brace For Crypto Market Waves: FTX And Celsius Are Sending MATIC, ETH, And WBTC To Binance

The crypto market might be about to experience a further downturn as a recent development suggests an imminent selloff is on the horizon. This comes following the recent market moves by Grayscale, which is believed to be responsible for the recent decline in Bitcoin’s price. 

Celsius And FTX Crypto Funds On The Move

On-chain data shows that defunct crypto lender Celsius Network recently transferred 34.08 million MATIC to the crypto exchange Binance. Meanwhile, a wallet address linked to Alameda Research, the sister company of defunct crypto exchange FTX, also recently sent 135 WBTC to Binance, 207 WBTC, and 1150 ETH to Wintermute.

These transactions are more significant, considering that Celsius and FTX are in a bankruptcy liquidation process as they look to repay their customers. As such, transferring these funds to trading platforms like Binance suggests that these tokens could be dumped on the market soon enough. 

Celsius, in particular, is known to have been making major moves in the market as of late. NewsBTC had recently reported how Celsisus had transferred $125 million worth of ETH last week to various crypto exchanges, something which could have possibly contributed to recent bloodbaths in the crypto market. 

On the other hand, selloffs by Alameda could form part of FTX’s repayment plan, which it filed back in December 2023. This is a huge possibility, considering the defunct trading firm was used as a tool by Sam Bankman-Fried (SBF) to defraud FTX customers. 

Crypto total market cap chart from Tradingview.com

Another Whale Contributing To Recent Market Downturn

Grayscale is also believed to have contributed greatly to the recent downturn in the crypto market. The asset manager has had to offload some of its BTC holdings in a bid to fulfill redemptions from GBTC investors. These investors have been taking profits ever since GBTC was converted into a Spot Bitcoin ETF, with an outflow of over $2 billion from the fund since then. 

Crypto analytics platform Arkham Intelligence recently revealed that Grayscale had sent out another 12,870 BTC from their wallets. That figure brought the total number of BTC that the asset manager has deposited into Coinbase to 47,900 BTC, which is said to be worth around $1.97 billion based on current prices.

As noted by Arkham, these transactions likely represent redemptions of BTC shares. Interstingly, JP Morgan predicts that Grayscale’s GBTC could experience an outflow of up to $3 billion. If so, then the market could be in for more pain as the asset manager would have to offload more BTC to fulfill these redemptions. 

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Ethereum Bloodbath Incoming? Celsius’ $125 Million Move Threatens ETH Price

The Ethereum price might be doing well post-spot Bitcoin ETF launch, but recent moves by Celsius threaten to destabilize the price movement. The now-bankrupt crypto lender seems to have begun its reimbursement plan to its creditors, as on-chain data reveal the movement of its ETH holdings to crypto exchanges.

According to crypto market intelligence company Arkham Intelligence, Celsius Network carried out transfers worth over $125 million worth of ETH last week to various crypto exchanges.

Celsius Transfers ETH To Exchanges

Data shows that between January 8 and January 12, Celsius executed transfers worth $95.5 million to crypto exchange Coinbase while also sending $29.73 million to FalconX. At the time of writing, Celsius Network’s balance sheet has 584,601 ETH worth $1.47 billion. Notably, it also has 9,799 BTC worth $418.2 million and 659 million CEL tokens worth $133.2 million on its books, among other cryptocurrencies.

Celsius’s motive behind the transfers into exchange points to nothing apart from an intending selloff, as the company is well on its way to clearing its liabilities under bankruptcy proceedings. 

Celsius filed for bankruptcy in July 2022 shortly after the fall of TerraUSD and the LUNA ecosystem, leading to creditors having their funds trapped on the platform for the last 18 months. However, the defunct crypto lender has been making major moves in its bankruptcy proceedings to refund creditors. According to reports, the company sold $240 million worth of ETH in December 2023.

Notably, the company communicated its decision earlier this month on January 5 to unstake $465 million worth of Ethereum (ETH) which will be distributed to its creditors.

Ethereum price chart from Tradingview.com

Incoming Ethereum Price Crash?

Ethereum is currently on a roll, still on a 13% gain in the past seven days. However, huge selloffs like this tend to shake market confidence, leading to a sell-off from other investors. On the other hand, some tend to believe that the crypto is sufficiently resilient.

It’s important to note that Ethereum retained its bullish sentiment during the time these transfers were made, as price action revealed a 23% jump from $2,191 on January 8 to $2,706 on January 12. Ethereum has declined since then and is now trading at $2,514. According to Coinglass, $23.84 million worth of ETH positions were liquidated in the past 24 hours.

Despite the recent large transfers, Celsius still retains significant cryptocurrency assets including ETH, BTC, MATIC, and LINK. A decision to continue the selling off of these assets could lead to a bigger dent in the price of the assets, particularly Ethereum, which is now testing the $2,500 support level.

On-chain data from Spotonchain also reported FTX and Alameda Research moving 1,000 ETH worth $2.33 million to crypto exchange Coinbase during the week.

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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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Ethereum Price Crash Looming? Celsius To Unstake $465 Million ETH

Celsius Network, the bankrupt cryptocurrency lending company, is gearing up to unstake approximately $465 million worth of Ethereum (ETH) as part of its efforts to compensate creditors. This development follows the company’s bankruptcy filing in July 2022, leaving creditors in a prolonged 18-month wait for financial recompense.

Celsius’s decision to unstake a substantial amount of ETH is seen as a necessary step to ensure liquidity for creditor compensation. The company’s official announcement, made via X (formerly Twitter), highlights the strategic nature of this move:

“In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity. Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process. The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors,” the announcement reads.

Celsius Responsible For Over 86% Of ETH In Exit Queue?

Blockchain analytics firm Nansen states that Celsius possesses approximately one third of the total Ether in the unstaking exit queue, totaling around 206,300 ETH. This figure translates to a market value of around $465 million. To date, Celsius has already withdrawn over 40,249 ETH.

Tom Wan, an on-chain data analyst at 21.co (parent company of 21Shares), elaborated on the situation, “Over 540k staked ETH (16,670 Validators) are currently withdrawing from the Ethereum Beacon chain. To fully exit and withdraw now, it will require 14.5 days.” The researcher added that 352,000 ETH (54.7%) waiting to be withdrawn belongs to Figment and 206,000 ETH (32%) belongs to Celsius.

Ethereum exit queue

“It is also likely that the withdrawal by Figment belongs to Celsius. Earlier in June, when Celsius redeemed 428.000 stETH from Lido, they have re-staked 197.000 ETH via Figment,” he added. Therefore, Celsius might be responsible for unstaking 86.7% of all ETH in the queue.

Ethereum Price Crash Looming?

While some investors express concern that the release of such a large volume of tokens from staking could adversely impact Ethereum’s price, others maintain a more composed outlook, believing that the market is robust enough to absorb this additional volume.

Even in the unlikely event that all ETH from the queue is sold, liquidity appears to be strong enough to absorb such a process, which would be gradual rather than sudden. According to Coinmarketcap, the current ETH trading volume stands around $11.35 billion, suggesting that the market could withstand the potential sale of Celsius’ entire ETH holdings without any major ETH price crash. Fear-mongering is therefore superfluous.

After receiving approval for its settlement plan, Celsius has allowed eligible users to withdraw 72.5% of their cryptocurrency holdings, with this option available until February 28. A court document filed in the previous September revealed that approximately 58,300 users possess a total of $210 million in assets, which the court has classified as “custody assets.”

At press time, ETH traded at $2,250. The 1-week chart for ETH/USD indicates that, over the past five weeks, the price of Ethereum has formed a consolidation range. The chart defines this zone with a lower boundary at $2,125, indicated by the red area, and an upper boundary at the 0.382 Fibonacci retracement level, located at $2,441.

Ethereum price

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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