Celsius Bankruptcy Administrator Requires Creditors Withdrawal To Repay 27.5% Of Assets
- The Celsius bankruptcy administrator mandates account holders who withdrew over $100,000 within 90 days of the July 2022 bankruptcy to repay 27.5% of funds.
- Creditors’ approval in September 2023 ensures 72.5% returns for custodial account holders and a mix of crypto and shares for interest-earning accounts.
In a recent development regarding Celsius bankruptcy, the appointed administrator has informed creditors that account holders who withdrew more than $100,000 within the 90 days leading up to the Celsius bankruptcy declaration on July 13, 2022, must return 27.5% of those funds.
Celsius Bankruptcy Administrator Sets Repayment Terms for High-Withdrawal Accounts
Failure to comply could result in legal action, as letters are being dispatched to relevant accounts detailing the repayment instructions.
On a more positive note, users who withdrew less than $100,000 are not required to return any funds. However, they are urged to vote in favor of the approved reorganization plan, which was greenlit by creditors in September 2023.
The plan stipulates that custodial account holders will receive 72.5% of their holdings in Bitcoin and Ethereum. Meanwhile, those with interest-earning accounts will receive a combination of cryptocurrency and shares from a new mining company formed from Celsius‘ remaining assets.
Celsius, having faced a severe liquidity crisis exacerbated by the cryptocurrency market downturn following the UST crash and FTX’s collapse, declared bankruptcy with a $1.2 billion deficit in its balance sheet on July 13, 2022.
Notably, Arkham Intelligence reports that Celsius still holds a significant amount of Ethereum, approximately 59,000 ETH valued at over $133 million, in its staked ETH account. This recent strategic move to seek repayment is seen as part of a broader plan aimed at unlocking a substantial portion of Celsius’ Ethereum holdings and facilitating the equitable distribution of assets to creditors—a crucial step in the ongoing bankruptcy proceedings.
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