Coinspeaker
Celsius Network Allows Withdrawals for Qualified Custody Clients
Bankrupt crypto lender Celsius Network has announced that some clients with custody assets can now make withdrawals from the platform.
Celsius which previously stopped withdrawals on its platform declared Chapter 11 bankruptcy in July 2022. Since then, many customers lost access to their assets. According to a court document, roughly 58,300 users hold “custody assets” valued at around $210 million on the platform.
Celsius’ Clients to Access About 72.5% of Funds
Per the new announcement, customers with Class 6A General Custody Claims and/or Class 6B Withdrawable Custody Claims can proceed to withdraw up to 72.5% of their claims.
However, clients who previously opted for custody settlement are exempted from the new deal. Likewise, customers who rejected the reorganization plan will not be eligible to make withdrawals. Instead, these customers will have their funds pooled into a segregated wallet managed by the Litigation Administrator over the following six months.
All customers who qualify for the withdrawals have till February 28 to complete their transactions. Celsius also advised customers to make use of its mobile app for the withdrawal, stating the app would only be available for a limited time.
Since the announcement, customers have reported varying degrees of technical issues. Customer complaints range from the inability to log into the app to the inability to request withdrawals. Others also reported failure to get confirmations for withdrawal requests.
Post-Bankruptcy Plans for Celsius Network
In other developments, a US bankruptcy court has approved the defunct’s organization plan to reorganize into a new entity called NewCo.
According to the approved plan, NewCo would concentrate on mining Bitcoin and collecting fees from staking validators. However, after further discussions with the SEC, NewCo has scaled back its post-bankruptcy business plans to focus only on Bitcoin mining. If this plan falls through, the firm will also consider an alternative plan for liquidation.
Again, NewCo plans to pursue litigation against its founder and former CEO Alex Mashinsky. Already, Mashinsky was sued by the SEC, FTC, and CFTC for misleading customers. He has been charged with seven counts of fraud, including securities fraud, wire fraud, and market manipulation. Unlike his former revenue officer, Roni Cohen-Pavon, who pled guilty to charges of fraud, Mashinsky maintains he is innocent of the charges. Consequently, he paid $40 million as bail. Mashinsky’s trial is set to commence in September 2024.
Celsius Network Allows Withdrawals for Qualified Custody Clients
