Celsius Reaches Settlements To Exit Bankruptcy, Return User Funds

Bankrupt crypto lender Celsius Network has reached two crucial settlements to end its bankruptcy proceedings and clear a path for the return of customer assets, revealed court filings.

Any responses or objections to the settlements must be submitted in court by the 3rd of August. 

Celsius Network filed for Chapter 11 Bankruptcy in 2022, and customers have been waiting in anticipation of the outcome of its bankruptcy proceedings. While the settlements that will allow the bankrupt crypto lender to return customer assets have been reached, they still have to be analyzed by Judge Martin Glenn at a hearing scheduled for the 10th of August. If agreed, the settlements will allow Celsius to conclude bankruptcy proceedings and see the long-awaited return of customer assets. 

Additionally, there is also a confirmation hearing on Celsius’ reorganization plan that has been scheduled for October. This means customers could begin to see the disbursements of their crypto and assets before the end of the year. Lawyers representing Celsius Network have argued that customers are owed no more than the initially deposited amount. However, users have filed several claims seeking additional damages for alleged misconduct by the firm’s former management. 

The first settlement addresses several claims related to fraud and misrepresentation allegedly committed by the previous Celsius management. Under the agreement, Celsius has committed to increase customer recoveries by 5%. Those account holders who do not want to participate in the settlement can opt-out and pursue individual claims against Celsius. Those who wish to remain part of the settlement will be eligible to receive a claim amount equivalent to 105% of their scheduled claim. This would also override any Proof of Claims filed earlier. 

“Any eligible Account Holder who does not opt out of the settlement will receive a claim in the amount of 105% of their scheduled claim, which will supersede and extinguish any related Proofs of Claim filed by such Account Holder. “

The second settlement addresses claims by customers that had funds locked in Celsius’ interest-bearing Earn program. Under this agreement, Celsius customers that borrowed crypto can receive a portion of their funds in the form of crypto assets. Furthermore, customers of the Earn program will also be compensated with shares of the new company that would be created once the bankruptcy proceedings have concluded. With these resolutions, it is hoped that impacted customers of the bankrupt crypto lender can have some restitution, along with a stake in the company’s future operations. Court documents state, 

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