Celsius Network Resolves Bankruptcy with Customer Asset Return

Jul 22, 2023

온라인 슬롯 사이트

Celsius Network could recover from bankruptcy by finally returning customer assets.

Resolving Bankruptcy

Celsius Network, a crypto lender that filed for Chapter 11 bankruptcy in 2022, has reached two crucial settlements. will enable the company to return assets to its customers and conclude the bankruptcy proceedings. The settlements are currently under review by Judge Martin Glenn and will be evaluated at a hearing on August 10.

ICYMI: Celsius Network reaches settlements that could clear path to return customer funds: WSJ

— The Block (@TheBlock__)

Settlement 1: Addressing Claims and Opt-Out Option

The first settlement focuses on resolving claims related to fraud and misrepresentation allegedly committed by Celsius management. As part of the agreement, the company has committed to increasing customer recoveries by 5%. Account holders who do not wish to participate in the settlement can still opt out and retain the right to pursue individual claims against Celsius. Those who choose to remain part of the settlement will receive a claim amount equivalent to 105% of their scheduled claim, overriding any previously filed Proofs of Claim.

Settlement 2: Resolution for Customers with Interest-Bearing Earn

The second settlement aims to address customers who had funds in Celsius’ interest-bearing Earn. Under this proposed agreement, customers who borrowed crypto funds can receive a portion of their funds in crypto assets. Additionally, they will be compensated with shares of the new company that emerges from the bankruptcy proceedings. This resolution aims to provide affected customers with some restitution and a stake in the future operations of the reorganized Celsius.

Background on Celsius Network’s Bankruptcy and Legal Issues

Celsius filed for bankruptcy in 2022 amid market turbulence caused by the collapse of the Terra ecosystem. A year later, its former CEO, Alex Mashinsky, faced criminal and civil charges of fraud and market manipulation.

In January, I sued the former CEO of cryptocurrency platform Celsius, Alex Mashinsky, for defrauding investors out of billions of dollars.

There are consequences for breaking the law in New York and in our nation.

— NY AG James (@NewYorkStateAG)

Both Mashinsky and other Celsius executives were also sued by the Securities and Exchange Commission for allegedly conducting unregistered and fraudulent offers, including the sale of crypto asset securities.

Celsius’ Path to Recovery

Following the settlements, Celsius aims to return user assets by the end of 2023. The company’s reorganization plan involves partially returning the crypto that users had deposited on the platform. To compensate for the remaining assets, Celsius will issue shares in a new entity that will be managed by a group of investors led by Michael Arrington, co-founder of TechCrunch. This new firm will handle Celsius’ illiquid assets and mining business, contributing to the company’s potential recovery.

Settlement Approval and Customer Disbursements

Despite these positive developments, the settlements are still subject to court approval. Celsius will seek this approval during the August 10 hearing. If approved, customers could expect to start receiving disbursements of crypto and other assets before the end of the year. Notably, Celsius’ lawyers argue that customers are entitled to only the amount they had initially deposited, but some users have filed claims seeking damages due to alleged misconduct by former management.

Conclusion

The settlements reached by Celsius Network represent a significant step towards resolving the company’s bankruptcy and restoring customer assets. With the potential approval of these agreements, affected customers can look forward to receiving their rightful assets and being part of the reorganized Celsius’ future through the issuance of shares. However, the final outcome will depend on the court’s assessment during the upcoming hearing.

Check out the latest Crypto News news bellow: