Bankrupt crypto lender Celsius Network has announced that it will be unstaking its Ethereum holdings in order to generate liquidity and distribute assets to its creditors. This decision is part of Celsius’ ongoing restructuring process and is aimed at offsetting the costs incurred during the bankruptcy.
Celsius has been earning staking rewards from its Ethereum holdings, which have been beneficial to the estate. Currently, the platform holds 32% of Ethereum, totaling 206,300 ETH, valued at over $466 million.
The crypto lender filed for Chapter 11 bankruptcy protection in July 2022 due to a severe liquidity crisis caused by the declining crypto market. As a result, withdrawals on the platform were frozen, impacting numerous users and their assets.
As part of its bankruptcy settlement plan, Celsius has allowed qualified users to withdraw 72.5% of their crypto holdings until February 28. Court filings from September last year revealed that nearly 58,300 users held custody assets valued at $210 million.
A U.S. bankruptcy judge recently approved Celsius’ shift in business focus to bitcoin mining. The lender has agreed to pay $4.7 billion in a settlement with the Federal Trade Commission, which coincidentally matches the approximate debt owed to 1.7 million customers whose funds were frozen.
Meanwhile, the founder and former CEO of Celsius, Alex Mashinsky, has been arrested on fraud charges and is currently out on bail. He is scheduled for a jury trial on September 17. Mashinsky has pleaded not guilty to multiple charges, including securities, commodities, and wire fraud, as well as manipulating the price of CEL tokens. Celsius’ chief risk officer, Roni Cohen-Pavon, is also facing the same charges.
If found guilty, both executives could face lengthy prison sentences.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Alex Mashinsky, Roni Cohen-Pavon |
| Companies | Manhattan federal court, Nansen, Federal Trade Commission, New York bankruptcy court, Celsius Network |
| Currencies | Ethereum |
| Securities | None |
