Celsius Fights To Reclaim $2 Billion Withdrawn Prior To Bankruptcy Declaration
March 20 2024 - 9:00PM
NEWSBTC
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. Related
Reading: Crypto Expert Reveals Why XRP Price Will Rise 1,700% To
$10 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. Related Reading: Shiba Inu
May Rise 250% Pre-Bitcoin Halving, Predicts SHIB Team 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. 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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