The once-prominent crypto lender, Celsius, continues to navigate its complex bankruptcy proceedings. Recent developments indicate that account holders who withdrew more than $100,000 within the 90 days leading up to the company’s bankruptcy declaration in July 2022 may be required to return a portion of those funds. This is referred to as “withdrawal preference exposure”.
Eligible account holders can settle their liabilities by remitting 27.5% of the funds by January 31, 2024. To do this, they must submit an election form by January 25, expressing their intent to make the required payment. Those who choose this resolution will receive a release of all avoidance actions and become eligible for distributions under the company’s reorganization plan.
However, those who do not settle by the deadline may face legal action. Administrators will address the withdrawal preference exposure through separate correspondence or legal action after January 31, 2024. Non-compliant account holders may face lawsuits to recover the preferences they received.
Celsius, which filed for bankruptcy in July 2022, has been undergoing a restructuring process. In March, the court approved a settlement plan, granting users with crypto in Celsius deposit accounts 72.5% of their funds in two payments throughout 2023. Creditors approved a reorganization plan in September, allowing the distribution of approximately $2 billion worth of bitcoin and ether from the bankruptcy estate.
In a strategic pivot, Celsius’s equity was transferred to NewCo, managed by the Fahrenheit consortium, which acquired the company in May. The consortium’s plans involve steering the new entity towards crypto mining and staking. This shift was approved by the court in November.
In November 2023, eligible participants were granted access to withdraw some of their cryptocurrency holdings. Celsius further streamlined its post-bankruptcy strategy in November, focusing on Bitcoin mining. This move was approved by the presiding judge in December.
Earlier this year, Celsius announced its plans to unstake its existing Ethereum holdings to meet its obligations to creditors. A significant portion of Ethereum in the pending withdrawal queue, valued at $468.5 million at current prices, belongs to Celsius.
The company’s actions continue to be shaped by a dynamic interplay of regulatory dynamics, creditor demands, and strategic considerations in the ever-evolving crypto landscape.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | Fahrenheit consortium, NewCo, Celsius, Nansen |
| Currencies | Ethereum, Bitcoin |
| Securities | None |
