CELUSD Archives

21st March 2024

Celsius Fights To Reclaim $2 Billion Withdrawn Prior To Bankruptcy Declaration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

11th January 2024

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

30th November 2023

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

30th November 2023

Empty Accounts Discovered As Celsius Allows Crypto Withdrawals For Eligible Users

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

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.

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.

Celsius

Featured image from Shutterstock, chart from TradingView.com

30th November 2023

Empty Accounts Discovered As Celsius Allows Crypto Withdrawals For Eligible Users

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

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.

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.

Celsius

Featured image from Shutterstock, chart from TradingView.com

19th October 2022

JPMorgan Taps Former Celsius Exec As Crypto Regulatory Policy Director

Nothing supersedes personal experience. At least that seems to be the case with a new JPMorgan Chase hire this week, as the financial firm has brought in former Celsius executive Adam Iovine to serve as a director of digital assets regulatory policy, according to a variety of reports on Wednesday, which cite Iovine’s LinkedIn page.

The reports come after headlines around JPMorgan’s CEO Jamie Dimon slamming crypto as ponzi schemes. Nonetheless, the institution has flip-flopped it’s public perspective around crypto while still building digital asset infrastructure. Let’s look at this latest, seemingly bizarre hire, and what we know thus far.

JPMorgan Chase: An Unexpected Hire

Iovine was previously the head of policy and regulatory affairs at cefi platform Celsius, which came to a crumbling downfall earlier this year. His stint at Celsius was brief, serving at the company for roughly 8 months before departing the role in September. Now, less than 60 days later, Iovine joins JPMorgan Chase as an executive director in the firms digital assets regulatory policy division. A bit of an unorthodox hire, but Iovines resume certainly brings some… unique experience from his time at Celsius.

The cefi platform, led by CEO Alex Mashinsky, was widely considered one of the biggest of it’s kind, offering substantial yields on tokens that led to hefty criticism over the platform’s viability. From the critic’s vocals to reality’s being, Celsius started unwinding mid-year falling the crash of the Terra Luna ecosystem.

It’s been a rocky road for cefi platform Celsius, but one company executive has moved on to bigger and brighter ambitions, joining JPMorgans digital assets regulatory policy division. | Source: CEL-USD on TradingView.com

A Flurry Of Inconsistency

Iovine’s hiring aside, JPMorgans perspective on crypto can never seem to remain consistent; the firm certainly wants to take advantage of the burst of interest in digital assets, but doesn’t seem to be much of a proponent of them otherwise. Dimon in recent weeks described crypto as “decentralized ponzis,” while still playing both sides and touting the institution’s latest blockchain-based product, JPMorgan Onyx.

Regardless of JPMorgan’s shifts in publicly-voiced sentiment, the role that Iovine is filling here is reportedly a newly created one, which serves as just another example that despite a crypto bear market, traditional finance players are still showing continued investment.

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

14th September 2022

Celsius CEO Mashinsky Proposes Resurrecting Platform As A Digital Asset Custody Firm

The saga that has been Celsius’ downfall this year has been well documented. CEO Alex Mashinsky has been a focal point of crypto critics after his engagement in ‘taking over‘ Celsius’ crypto strategy in the 11th hour before the platform’s pseudo-shutdown.

That isn’t slowing down a persistent Mashinsky, who, despite enduring a slew of bankruptcy procedures, continues to trudge along in forecasting some sort of future for Celsius. This week, Mashinsky is looking to reposition Celsius as a digital asset custody firm, according to a new report from The New York Times.

What Led To Today’s Celsius ‘Doom & Gloom’

About a year ago, state regulators across a handful of U.S. states started setting their sights on yield-generating platforms such as BlockFi and Celsius. Celsius, for some time, was offering aggressive rates for holding tokens on the platform. At it’s highest point last year, Celsius held tens of billions of funds and at times, promised double digit percentage yield that was compounding weekly.

As 2022 came into the fold, the market was middling but certainly not into ‘bear mode’ when Mashinsky and company rolled out their initial “custody solution.” Within a few months later, following the crumbling of Terra Luna, the platform was revealed to have exposure to DeFi protocols, including the likes of Terra’s Anchor Protocol, and was experiencing strong headwinds from more aggressive market conditions. It was around this time that Mashinsky starting deepening his position in company strategy. By July, the company had frozen user funds and filed for bankruptcy.

Celsius (CEL) token has seen a volatile short-term performance. | Source: CEL-USD on TradingView.com

The Pivot: Can It Work?

According to the Times report, in the past week, Mashinsky has proposed a project codenamed ‘Kelvin,’ where Celsius shifts to solely providing custody services and collecting fees from depositors. According to the report, Celsius employees were rightfully skeptical. Mashinsky countered to internal skeptics, according to the Times, by citing some of the biggest corporate turnarounds, telling employees: “Delta filed for bankruptcy. Do you not fly Delta because they filed for bankruptcy?”

The short stroke is that Celsius’ credibility is just as bankrupt as it’s balance sheet. Take one look at Celsius’ Twitter replies for a prime example. While Delta and Pepsi recovered from bankruptcy, they did so in different eras, and more importantly: neither was beholden to mass amounts of customer’s wealth. The brand image and identity behind the firm is likely a ship too far sailed.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

3rd September 2022

CEL Price Surged 50% After Celsius Reopens Withdrawals Of $50M

Celsius announced that users could cumulatively withdraw up to $50 million from all the locked accounts. These funds are for users who own Celsius Custody Program and Withhold Accounts. This latest decision to reopen withdrawals has spiked the price of CEL by 50%.

As of September 2, CEL’s price stood at $1.67, showing a good price shift from $1.15 per token on September 1.

The CELUSD chart on Tradingview.com indicates that the token has lost some of its gains this morning. It now stands at $1.50, which is still higher than yesterday’s lows and shows positive price movements.

But the sudden increase might not be sustainable. Data shows that CEL trading volume didn’t spike with the price. Analysts see this low volume as traders’ lack of conviction in a continuing uptrend.

Imminent Price Drop For CEL Looms

The CEL four-hour chart shows that the token started painting a rising wedge since the August end. This pattern is usually a sign of an upcoming bearish price reversal. Also, CEL is testing the upper trendline for a pullback to the lower line.

CEL latter trendline is closer to $1.34. It has been serving as a good support zone. Any break below this support might increase the selling pressure in the market. A rising wedge breakdown setup will emerge if the CEL price plummets below $1.34.

By that, the token’s downside target would be as low as the maximum distance between the upper and lower trendline of the wedge if measured from its breakout point. The interpretation, CEL might lose 40% from September 2 price to stand at $0.87 by the end of September.

CEL’s price currently stands around $1.44. | Source: CELUSD price chart from TradingView.com
Negative Fundamentals Hanging Over Celsius

Celsius recently requested the Bankruptcy Court to permit its CPWA clients to withdraw their funds. Celsius utilized users’ funds to operate in the broader market while promising them mouth-watering returns.

But the firm froze the accounts when the crypto winter wrecked havoc on its balance sheet. Data showed that Celsius lost $2.85 billion due to the market crash. The loss led to locking billions of dollars in more than one million accounts on its network.

The firm might have pushed CEL’s price up by this announcement. However, it might not sustain the price increase. According to Simon Dixon, BNKToTheFuture CEO, the total money locked by Celsius in the CPWA is worth $210 million. But the company wants to release only $50 million.

Also, as of July 10, the court documents showed that Celsius Earn Accounts had up to $4.2 billion worth of assets. These factors will impede the growth of the network token. Unless the firm acts accordingly, the 50% price growth might be a waste.

Featured image from Pixabay and chart from TradingView.com

9th August 2022

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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