Celsius’ Major Creditors to Return 27.5% of Withdrawn Funds

• Celsius bankruptcy managers have filed for customers to return a part of withdrawn funds or face legal action.
• Those affected by the filing include Celsius’ customers who withdrew over $100,000 within 90 days before July 12, 2022.
• Celsius bankruptcy managers informed customers that they would receive an email detailing how to resolve their outstanding liabilities.

Celsius bankruptcy managers have filed against customers who withdrew large sums from the crypto lender within 90 days before it declared bankruptcy to return a part of the funds or face legal action. Those affected by the filing include Celsius’ customers who withdrew over $100,000 within 90 days before July 12, 2022, as contained in a notice published on Tuesday.

In a filing at the United States Bankruptcy Court of the Southern District of New York, Celsius bankruptcy managers informed customers that they would receive an email detailing how to resolve their outstanding liabilities. Such liabilities would cover 27.5% of what they withdrew in the affected period. Complying customers would become eligible for future distributions under the company’s reorganization plan.

The filing further specified that apart from a withdrawal preference greater than $100,000 within the specified period, those who would receive the emails are non-excluded parties who did not vote to reject the plan or any claims. They would also not have opted out of the releases under the reorganization plan.

According to the filing, account holders who want to settle their Withdrawal Preference Exposure have until January 25 to indicate their intent. They are to do so by submitting the Election Form and must make their settlement payment on or before January 31, 2024.

Celsius declared bankruptcy on July 13, 2022, following a $1.2 billion hole in its balance sheet. In September 2023, creditors approved a reorganization plan involving a 72.5% reimbursement to custodial account holders in Bitcoin and Ether, while holders of interest-earning accounts would get a combination of crypto and shares of a new mining company that will be formed out of Celsius’ remaining assets.