Coin Edition -
- Bankruptcy judge approves 72.5% settlement for Celsius custody account holders.
- Customers accepting the condition will receive payment in two tranches of 36.25% each.
- Accepting the settlement will mean losing the right to pursue further litigation.
A United States bankruptcy judge, Martin Glenn, has approved the settlement agreement for Celsius custody account holders to receive 72.5% of their crypto claims. There will be a review of the settlement agreement within 30 days, and customers who opt to go with it will receive payment in two tranches of 36.25% each, with the first payment coming up front, while the second tranche will be paid by the end of the year.
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).— Cam Crews (@camcrews) March 21, 2023
According to reports, the settlement agreement comes with additional conditions, including the position that customers who accept the settlement will lose the right to pursue further litigation. The settlement provision does not cover Celsius’ employees and other insiders who may have played a role within Celsius.
The Celsius collapse was among the major setbacks of the cryptocurrency industry in 2022. The crypto lender froze customer accounts in June 2022, citing “extreme market conditions.” One month later, the company filed for bankruptcy, marking the beginning of a legal process that has lasted to date.
On December 7, 2022, Judge Glenn ordered Celsius to return about $44 million worth of crypto to its customers. The ruling considered this amount a tiny fraction of the total amount the lending platform owed creditors, said to run into billions. That order affected only custody holders who never had anything to do with Celsius’ Earn accounts.
Following the December order, on January 4, 2023, the same judge ruled that based on the Celsius Earn program terms of use, all funds in the interest-bearing program belonged to the company. The funds in question reportedly amounted to $4 billion. According to the verdict, the judge stated that lending platform Celsius held “all rights and title to such Eligible Digital Assets, including ownership rights.”
The latest ruling, pronounced on March 21, 2023, marks another step in resolving one of the landmark setbacks of the crypto industry. While the judgment provides a 30 days review period for all involved, it also provides a second opportunity for creditors to opt-in upon the plan approval.
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