Celsius Network reaches settlements to exit bankruptcy

Crypto Lender Celsius Network Settles Bankruptcy Proceedings

Crypto lender Celsius Network, which filed for bankruptcy, has reached two settlements that will enable it to return assets to customers and conclude the bankruptcy proceedings, according to court filings on July 20.

Judge Martin Glenn will assess the settlements, which involve $78.2 billion in unsecured claims, at a hearing on August 10. Any objections should be submitted to the court by August 3.

The first settlement resolves claims concerning allegations of fraud and misrepresentation by Celsius management by increasing customers’ recoveries by 5%. Customers can still retain their rights to pursue individual claims against Celsius if they decide to opt out of the settlement.

The second settlement offers a solution for customers with funds in Celsius’ interest-bearing Earn. Under the proposed agreement, customers who borrowed crypto funds will be able to receive a portion of their funds in crypto assets, as well as compensation in shares of the new company emerging from the bankruptcy proceedings.

Celsius Bankruptcy and SEC Lawsuit

Creditors of Celsius have agreed to an amended Plan that will allow Retail Borrower Deposit Claim Holders to opt to receive an equivalent amount of cryptocurrency in lieu of their loan principal, which could result in tax benefits compared to the Setoff Treatment. Additionally, these Holders will have priority in electing a preference to exchange NewCo Equity for Liquid Cryptocurrency at a 30% discount.

On July 2022, Celsius announced a pause in all withdrawals due to market turbulence stemming from the collapse of the Terra ecosystem and subsequently filed for Chapter 11 bankruptcy. On July 13, 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against former CEO Alex Mashinsky and other Celsius executives for raising billions of dollars through unregistered and fraudulent offers, and selling crypto asset securities. The Federal Trade Commission (FTC) also announced civil cases against Mashinsky and issued $4.7 billion in fines for allegedly duping users and squandering billions in user deposits.

The crypto space has seen many platforms such as Agix Crypto, Anchor Crypto, Aave Crypto, Alchemy Pay Crypto, and 000 Pieces appear on the Crypto Press Cryptocurrencies Network. Additionally, Reddit users have discussed Alchemy Crypto, Alchemix Crypto, Web 3.0 Cryptocurrency, and Web 3.0 Crypto Tokens List.

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