Bankrupt crypto lender Celsius may require its creditors who withdrew large sums from the platform before its bankruptcy declaration to return part of those funds or face legal action. On January 9, the company’s bankruptcy administrators filed an intent to notify creditors that account holders who withdrew more than $100,000 in the 90 days before the company declared bankruptcy on July 13, 2022, may be required to return them.
The filing stated that account holders with “withdrawal preference exposure” over $100,000 who are not excluded parties, did not vote to reject the reorganization plan, and did not opt out of releases can settle their liability by paying 27.5% of the funds by January 31, 2024. Those wanting to settle should submit an election form by January 25 indicating their intent to make the settlement payment.
Account holders who settle will receive a release of all avoidance actions and will receive distributions under the reorganization plan. Those who do not settle by the deadline will have their withdrawal preference exposure addressed by administrators and may be sued to recover the preferences they received. “Any Withdrawal Preference Exposure that is not settled by January 31, 2024, will be addressed by the Litigation Administrator after the Effective Date through separate correspondence or other action,” the filing stated.
In late November, Celsius administrators granted access to eligible participants to withdraw some of their cryptocurrency holdings. Celsius has been actively unstaking and withdrawing Ethereum in preparation for “timely distributions to creditors.” According to Nansen, it currently comprises 20.3% of the withdrawal queue with 112,037 ETH valued at approximately $266 million.
In November 2023, the firm announced a scaled-back post-bankruptcy strategy focusing on Bitcoin mining, which was approved by the judge presiding over the bankruptcy proceedings at the end of December.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | negative |
| Relevance Score | 1 |
| People | None |
| Companies | Celsius, Nansen |
| Currencies | Ethereum, Bitcoin |
| Securities | None |
