Celsius, a cryptocurrency lender that filed for bankruptcy last summer, has started allowing withdrawals for some users.
Customers of the custody program who hold a “Class 6A general custody claim” and/or a “Class 6B withdrawable custody claim” will be able to begin withdrawing funds from the platform on or around November 29, according to court documents. They have until February 28th to make a deal.
Eligible users can withdraw 72.5% of their cryptocurrency, excluding transaction fees, if they have not previously participated in a custody agreement. Clients who voted to reject the restructuring plan will not participate in this distribution and their funds will be pooled in segregated wallets and managed by a litigation administrator for the next six months, the document says.
Some users have already tried to withdraw and complain According to X’s post, he was having trouble logging in.
About 58,300 users held what the court classified as “custodial assets” worth about $210 million, according to a September court filing.
state of bankruptcy
Celsius filed for bankruptcy in July 2022. Last March, the court approved a settlement plan that would allow users holding cryptocurrency through Celsius in their savings accounts to receive 72.5% of their funds in two installments over 2023.
Last September, creditors approved a restructuring plan that would allow the bankruptcy estate to distribute about $2 billion worth of Bitcoin and Ethereum. Celsius’ stake was confirmed to be transferred to NewCo, controlled by the Fahrenheit consortium, which won a bid to take over the bankrupt company in May. Farenheit plans to pivot his new company into cryptocurrency mining and staking. A judge approved the plan on November 9.
Celsius and its founder and CEO, Alex Mashinsky, were also sued by the SEC, FTC, and CFTC this summer for allegedly misleading customers. Mashinsky was also charged with fraud. Celsius immediately reached an agreement with the FTC to pay $4.7 billion following the conclusion of bankruptcy proceedings.
Mashinsky’s criminal trial is scheduled to begin next fall.
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