Due to the collapse of Celsius Network, peer-to-peer marketplace Paxful will reimburse customers of its Earn program.
According to a tweet from firm CEO Ray Youssef on March 29, cryptocurrency marketplace Paxful will reimburse customers of its Earn program who were impacted by the Celsius Network failure in 2022.
Youssef said, “I’ve personally taken action and will be refunding all affected Paxful users,” adding that money would be accessible in the platform’s wallet soon for the affected consumers.
On July 14, Celsius filed for Chapter 11 bankruptcy in the US, locking the assets of thousands of depositors onto the crypto lending marketplace. At the time, neither the business nor its CEO, Alex Mashinsky, publicly addressed whether depositors could anticipate receiving any portion of their money. User deposits, which totaled $4.72 billion, made up the majority of Celsius’ liabilities, according to the bankruptcy petition.
Paxful has not yet made public the amount it is paying back to customers. Judge Martin Glenn determined on January 4 during a bankruptcy hearing that, in accordance with the terms of use of the interest-bearing Earn program, Celsius controls the monies therein, not the program’s depositors. On the choice, Youssef said:
“The [Celsius] collapse hurt countless users and damaged trust in our industry. Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius. Another hit came when the courts ruled that Celsius Earn Account belonged to Celsius’ bankruptcy estate, not to its users. This didn’t sit right with me then, and it still doesn’t sit right with me today.”
The bankruptcy case for Celsius is still pending. The committee of unsecured creditors and a group of account holders recently adopted a settlement proposal, allowing the account holders to recover 72.5% of their cryptocurrency holdings.
The bankrupt platform claimed that over 85% of Celsius customers would be able to reclaim almost 70% of their cryptocurrency assets in a February announcement that NovaWulf Digital Management will serve as a sponsor for its restructuring plan.
