Cryptocurrency exchange Paxful will refund users of its Earn program affected by the Celsius Network collapse in 2022, according to a Twitter thread posted on March 29 by company CEO Ray Youssef.
“I have personally taken action and will refund all affected Paxful users”, Youssef noted, explaining that the funds will be available to affected users in the platform’s wallet in the coming days.
Celsius filed for Chapter 11 bankruptcy in the United States on July 14, leaving thousands of depositors with their assets locked up on the cryptocurrency lending platform. At the time, neither the company nor its CEO, Alex Mashinsky, publicly commented on whether depositors could expect any percentage of their funds. According to the bankruptcy filing, user deposits made up the majority of Celsius’ liabilities, at $4.72 billion.
We have done the right thing and refunded @paxful users who lost funds with Celsius Earn. I could not stand by and watch them suffer, so we’ve made them whole. Our users always come first to me, this is the way pic.twitter.com/aQox7qspOh
— Ray Youssef (@raypaxful) March 29, 2023
At the moment, Paxful has not revealed how much it is giving back to clients. Cointelegraph reached out to Paxful, but did not receive an immediate response.
“Celsius’ bankruptcy harmed countless users and damaged trust in our industry. Paxful, like many others, was paralyzed from acting when unable to recover funds held by Celsius. Another blow came when courts ruled that the account The Celsius Earn Account belonged to the Celsius bankruptcy estate, not its users. This didn’t feel right to me then, and it still doesn’t feel right to me today.”
Celsius’ bankruptcy proceedings are still open. Recently, a settlement plan was approved between the unsecured creditors committee and a group of account holders, allowing account holders to recover 72.5% of their cryptocurrency holdings. The defunct platform announced in February that NovaWulf Digital Management would act as a sponsor of its restructuring plan, claiming that more than 85% of Celsius clients could recoup roughly 70% of their crypto assets.
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