According to a recent creditor notification, creditors who took over $100,000 out of Celsius within three months of the company’s bankruptcy may need to reimburse some of those monies or face legal repercussions.
Celsius’s bankruptcy administrators revealed on January 9 a proposal to notify creditors that anyone who took out more over $100,000 in the ninety days preceding the filing date of July 13, 2022, might have to reimburse these monies.
According to the petition, account holders who took out more than $100,000 in withdrawals and did not relinquish their rights can settle their debt by paying back 27.5% of the money they took out by January 31, 2024.
Account holders must register their desire to participate in this settlement via an election form by January 25, 2024. Recipients of the settlement will get the distributions specified in the restructuring plan and immunity from future legal challenges.
If account holders don’t make the settlement date, the administrators will take action, which could result in lawsuits to recover the money. On July 13, 2022, Celsius declared bankruptcy due to a $1.2 billion deficit.
A restructuring plan that offered custodial account holders 72.5% of their Bitcoin (BTC) and Ether (ETH) holdings was approved by creditors in September 2023.
Owners of interest-bearing accounts were to get a combination of cryptocurrency and stock in a brand-new mining firm established out of Celsius’s leftover assets.
Celsius effectively emerged from bankruptcy in November, allowing withdrawals for eligible creditors. The SEC, FTC, and CFTC filed lawsuits against the business and its CEO, Alex Mashinsky, alleging that they deceived customers. Mashinsky was also charged with fraud. The trial is scheduled for the fall of 2024.
Celsius consented to pay the FTC $4.7 billion in settlement after declaring bankruptcy. Concurrently, Celsius sent over $90 million in unstacked Ethereum to its principal debtors, Coinbase and FalconX, during the previous week.
The action is a component of a larger strategic plan to sell off a sizable amount of its Ethereum holdings to improve liquidity for restructuring expenses and guarantee creditor payments on schedule.
