FTX Bankruptcy Plan Continues to Be Objected by Celsius to $444M Claim

Key Points:

• Celsius Network has filed an appeal challenging the dismissal of its $444 million claim against the FTX bankruptcy plan.
• Initially seeking $2 billion, Celsius reduced its claim to $444 million, focusing on preferential transfers, but a judge dismissed both claims due to procedural issues.

Celsius Network is appealing the decision made by a U.S. bankruptcy court that has rebuffed its claim of $444 million against the FTX bankruptcy plan.

Read more: FTX Reorganization Plan Will Take Effect on January 3  

Celsius Network Appeals Court Decision over FTX Bankruptcy Plan

The notice of appeal, filed on Dec. 31 by Celsius’ litigation administrator Mohsin Meghji, aims to reverse the Dec. 18 ruling by Judge John Dorsey.

The now-defunct crypto lender initially filed a $2 billion claim against the FTX bankruptcy plan, alleging that FTX executives had made misleading statements which ultimately undercut the financial stability of Celsius and led to its implosion.

The claim was later reduced to $444 million, focusing the case narrowly on claims of preferential transfers that gave some creditors an unfair advantage. Judge Dorsey dismissed both claims on the grounds of procedural defects and want of evidence to support those claims.

Celsius Pays Billions to Creditors as Founder Faces Fraud Charges

Celsius has been in and out of court since it filed for bankruptcy in 2022. According to its restructuring plan, Meghji was mandated to prosecute lawsuits on behalf of creditors. Though the company has suffered some losses in court, it is still determined to recover money for its creditors through the courts.

The company has already distributed more than $2.53 billion to about 251,000 creditors under its restructuring process. This first distribution, completed in August, covered about two-thirds of eligible creditors and 93% of total claim values. In November, Celsius announced an additional $127 million distribution, further helping creditors.

Meanwhile, Celsius founder Alex Mashinsky has some legal problems of his own. Mashinsky pleaded guilty last month to fraud charges, including those relating to the manipulation of the price of Celsius’ native token CEL. He is scheduled for sentencing in April 2025, with one charge carrying a potential 20-year prison term.