Celsius Networks Ltd., a crypto lender that filed for Chapter 11 bankruptcy protection on July 13, is seeking to release approximately $50 million worth of crypto assets to Celsius escrow account holders. As noted, Celsius Savings Accounts are not participating in the Earnings and Loans program. A court hearing regarding the relief issue will be held on October 6.
Celsius asked the borrowers to ‘reopen the withdrawal for certain customers’
Court documents show Celsius is looking to release nearly $50 million to select customers. The borrowers’ request seeks to “reopen withdrawals to certain customers by retaining certain assets and accounts held in the retention program and subject to related relief.” Celsius filed for bankruptcy on July 13, 2022, after the company paused “all withdrawals, swaps and account transfers” a month earlier on June 12.
Celsius’ bankruptcy proceedings are so extensive that the lender’s customers have written to the court asking for their money to be released. A client explained that it is a matter of keeping a roof over the family and food on the table. According to reports, Ripple Labs was interested in Celsius and the company’s assets, after the company was asked to comment on the bankruptcy court case.
In mid-August, a Financial Times report cited anonymous sources as saying that Celsius Network CEO Alex Mashinsky had taken over the crypto-lending company’s business plan and made a bad bet. In the year On August 16, Celsius Network was approved by a bankruptcy court judge to sell Bitcoin (BTC). In late August, the company sued Kiffin founder Jason Stone for allegedly stealing millions from the crypto lender’s wallets.
A month ago, on July 7, 2022, Stone told the public that it had hired Roche Freedman LLP to bring Celsius to court. “Finally, I feel it would be wise to set the record straight. I have filed legal action against Celsius to resolve this matter once and for all,” Stone said at the time. This week, the latest court filing reveals that Celsius wants to release the money to a certain segment of customers. The customers hold their money in Celsius using the escrow program, and the borrowers’ inquiry said these types of accounts are different.
A bankrupt company cannot be supported by every customer’s recent debtors’ request.
Guardians’ money probably won’t. [as] Their assets, access to customers or loans “may be assets of the estate,” the filing notes. Celsius also announced that the escrow account assets will not be released “to any current or former employees or internal employees or to any current or former employees or internal partners.” The petition filed by Celsius said the crypto-lending company understands that some customers may not like the relief it offers regulators. The court records read:
The Debtors acknowledge that the relief sought in this action may not be supported by every customer or stakeholder.
What do you think about the Celsius protection account that wants to provide relief to customers? Let us know what you think about this in the comments section below.
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