A federal judge has ordered cryptocurrency lender Celsius to return $44 million worth of cryptocurrency to customers of the platform’s escrow program.
According to Bloomberg, The verbal order was issued by United States Bankruptcy Judge Martin Glenn at a hearing held on December 7, in which the judge stated:
“I want this case to move forward. I want the creditors to recover as much as they can as soon as possible.”
The amount – which applies only to cryptocurrency deposited within custodial accounts – is a small fraction of the billions Celsius owes to creditors, and the latest decision comes after an agreement was reached between Celsius advisers and interested parties that the cryptocurrencies deposited in the custodial accounts belonged to its users and not to the platform.
It’s important pointing that this order only applies to pure escrow assets, which are assets that have never touched Celsius Earn accounts and have only been held in the escrow program.
Celsius had more than USD 210 million in custodial accounts as of August 29, but only about $44 million of the funds fit the criteria of the latest order.
On the other hand, Celsius Earn accounts, which are the accounts that allowed depositors to earn interest, is where most of the $4.7 billion in user funds is currently locked up.
Celsius has argued that users who deposited funds into their Earn accounts relinquished ownership of the funds when they accepted the company’s terms of service, and a Bloomberg report on December 5 suggests that Celsius is trying to sell $18 million of stablecoins in these accounts to fund his reorganization, as Glenn is scheduled to address the issue of ownership of the funds on December 12.
For his part, On December 5, the lender received court approval for a $2.8 million Key Employee Retention Program (KERP) that it filed on October 11.
#CELSIUS HEARING LIVE: KERP is approved. Discussing Celsius Exclusivity now. K&E talking about the Feb 15 compromise. Expanding that the auctions and plan formation are all in coordination with the UCC and they are cognizant of the level of frustration in the community.
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) December 5, 2022
LIVE CELSIUS HEARING: KERP has been approved. We are discussing the exclusivity of Celsius now. K&E are talking about the February 15 engagement. They expand that the auctions and the formation of plans are all in coordination with the UCC and they are aware of the level of frustration in the community.
Bonuses will be paid to select employeesand are intended to ensure that your employees remain with the company so that it can continue its limited business operations.
Celsius employees have resigned en masse, and only 170 remain with the company, up from 370 when it filed for bankruptcy.
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