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- Celsius filed for bankruptcy on July 13, one month after halting withdrawals for its 1.7 million users.
- Court had ordered the release of funds to select users whose funds are not tangled with other assets.
- $7,575 is the threshold limit for custody accounts.
Celsius Network was among the list of crypto entities that had filed for bankruptcy in 2021. It halted withdrawals and transfers for its 1.7 million customers one month before filing for bankruptcy on July 13. After the hearing, the court ruled to return the deposits of select few customers whose funds are not tangled with other assets.
Celsius will now establish communication with affected users, informing them about the implications of the court hearing and the next possible course of action. The company said this in December 8 tweets.
“We will be communicating directly with customers as quickly as practicable to share more on what this means and what’s next. We remain committed to ensuring that all similarly situated customers are treated similarly.”
Type of assets to be given as compensation.
The company had also clarified the type of assets for which the company is allowed to atone per the court’s rulings.
“The Court authorized Celsius to return ‘pure’ Custody Accounts that were never in the Earn Program or Borrow Program, as well as ‘transferred’ Custody Account assets below $7,575 (a legal threshold).”
Undeniably, Celsius was among the initially affected companies who faced the heat of the ongoing bear crypto market and crypto winter, which resulted in its withdrawal halt. The company then cited extreme market conditions before filing for chapter 11 bankruptcy.
Alex and family threatened on social media, pleads Elon Musk for help
Former Celsius CEO Alex Mashinsky was under severe criticism for his mismanagement, which caused the firm to implode. After the Celsius collapse, Alex complained about increased threats to his family via social media.
Maybe the affected people were doing this out of frustration. But it is ethically and morally wrong to take laws into one’s own hands. One must trust the due process of law.
Mashinsky then went on to plead to Elon Musk on December 8 to identify the users threatening him and his family.
As reported by Finbold, Mashinsky’s wife is alleged to have withdrawn $2 million in crypto just before the bankruptcy announcement.
The Crypto market is eagerly waiting for the hearing on FTX’s collapse. Meanwhile, Celsius’s bankruptcy hearings are going on and some users have found closure. However, the majority of users of these bankrupt firms struggle to find their funds.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
