A bankruptcy judge overseeing the bankruptcy case of cryptocurrency lending platform Celsius Network has approved a liquidation plan that allows custodial account holders to recover 72.5% of their cryptocurrency holdings.
In a hearing on March 21, United States Bankruptcy Judge Martin Glenn gave the go-ahead to a deal that allows Celsius custodial account holders the right to receive 72.5% of their cryptocurrency claims as long as they approve the deal. Under the settlement, the plaintiffs will be barred from “bringing any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action” and digital assets not part of the settlement will be controlled by the debtors. of Celsius.
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).
—Cam Crews (@camcrews) March 21, 2023
Bankruptcy Court: Celsius Custody agreement is approved. It will be optional for customers. 30 days to review it. Those who elect will receive 72.5% of their claim in two distributions 36.25% in advance and 36.25% at the resolution of the plan (or at the end of the year).
The agreement between the committee of unsecured creditors, Celsius’ debtors and an ad hoc group of account holders was the latest development in the lending platform case in the United States Bankruptcy Court for the Southern District of New York. since filing for Chapter 11 Bankruptcy in July 2022. The defunct platform announced in February that NovaWulf Digital Management would act as sponsor of its restructuring plan, which suggested that more than 85% of Celsius clients would get roughly 70% of their crypto back.
Judge Glenn ruled in January that more than $4 billion in funds from Celsius Earn’s interest program belonged to the lending platform. However, a December ruling ordered some $44 million worth of cryptocurrency to be returned to Celsius customers, and a February judge’s decision authorized Celsius’s debtors to sell $7.4 million worth of Bitmain coupons if necessary.
Bankruptcy proceedings for major cryptocurrency firms amid the 2022 market crash are ongoing in US courts, now the backdrop of bank failures including Signature, Silicon Valley, and Silvergate. On March 17, debtors in the FTX exchange bankruptcy case reported a deficit of approximately USD 7,000 million between the assets programmed and claims.
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