Celsius Refund 72.5% Of The Crypto For Its Custody Account Holders

Key Points:

• Holders of a Celsius custody account may obtain 72.5% of the crypto in their custody account.
• Individuals who accept the settlement must agree not to pursue any legal action.
• The agreed settlement does not relinquish any rights or causes of action pertaining to assets held in the Earn program.

A New York bankruptcy court authorized an agreement reached between ailing cryptocurrency lender Celsius Network and its custody account holders that would enable them to withdraw 72.5% of their claims.

Martin Glenn, a bankruptcy court judge in the United States, authorized the settlement deal reached by the Celsius debtors, the unsecured creditors’ committee, and an ad hoc group of custodial account holders.

The deal forbids the claimants from pursuing any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action, and the Celsius debtors will control any digital assets not included in the settlement.

Individual custodial account holders would get their 72.5% claim in two distributions under the terms of the agreement, bringing the bankruptcy case one step closer to completion. The first tranche would be released immediately, and the second payment would be paid before the end of the year if the idea is approved.

The agreement reached between the committee of unsecured creditors, Celsius debtors, and an ad hoc group of account holders was the most recent development in the lending platform’s case in the United States Bankruptcy Court for the Southern District of New York since it filed for Chapter 11 in July.

In February, Celsius reported that its committee of unsecured creditors had chosen Novawulf to sponsor its planned Chapter 11 restructuring scheme. It was predicted that more than 85% of Celsius customers would recover around 70% of their crypto.

According to the settlement, the 72.5% return would be paid over time and would not include transaction costs. Consumer assets have often been a source of contention in the Celsius bankruptcy case.

In January, Glenn determined that assets in Celsius Earn accounts belonged to the company, not the clients. The settlement announced on Tuesday does not relinquish any rights or causes of action linked to Earn assets.

Consumers owed more than $5,000 by Celsius will be able to decrease their claim to join the class and be compensated from the company’s residual crypto assets. Claimants due at least $1,000 may also opt out of the class and receive a percentage of the cash collected for general Earn members.

The announcement comes at a time when the Celsius creditors’ community is becoming impatient as they watch legal fees continue to increase after the company’s first bankruptcy filing in July.

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Harold

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