Celsius wants to return $210 million worth of custody assets

Cryptocurrency lender Celsius Network, which initiated Chapter 11 bankruptcy proceedings in July, wants to return client assets in the custody program and hold accounts worth approximately $ 210 million, the company said in a statement from the September 1st.

According to the filing, approximately 15,680 Celsius users hold “pure custody assets” worth approximately $ 43.87 million around August 27. Another 22,580 users hold “transferred custody business” worth approximately $ 11.25 million as of Aug.31, the company said in the filing.

Additionally, according to the filing, 5,000 Celsius users hold assets worth approximately $ 15.33 million in Withold accounts.

Celsius’s analysis determined that these assets are part of the client’s properties and not part of its bankruptcy estate, according to the statement. Therefore, Celsius has petitioned the court to allow eligible customers to withdraw such assets from its platform.

On October 6, the New York Southern District Bankruptcy Court scheduled a hearing on the motion.

In the filing, Celsius said the assets in his Earn and Borrow program are property assets. For example, if a customer has a loan pending under the Borrow program, the user’s assets in custody or withholding may serve as collateral and is, therefore, a property of the inheritance. The company will not unlock the accounts of such users, she stated in the vault.

Celsius also said it is not seeking to return custody or withholding of assets to current or former employees or employees of affiliated companies.

According to the filing, while Celsius’s Creditors Committee has yet to give its real blessing on the proposal, the company said the committee is “generally in favor of releasing the relevant cryptocurrency assets.”

Celsius’s filing comes the day after a group of creditors filed a lawsuit against the company demanding repayment of approximately $ 22.5 million in the company’s custody accounts.

In its latest filing, the company added that while some customers may be disappointed with the current proposal, it’s the:

“the first step towards, and not the last word, efforts to return assets to customers where possible without compromising the efforts of debtors to maximize value and distribute that value to all customers in the most equitable way possible.”

The Celsius bankruptcy saga

Celsius Network was one of the first cryptocurrency lenders to stop withdrawals and transfers on its platform in early June. Soon after, a number of lenders followed suit. While Celsius filed for bankruptcy in July, other lenders have either embarked on their own restructuring processes or sought protection from bankruptcy to buy time to return client funds.

Celsius had over 1.7 million registered users, of which about 300,000 were active users with balances over $ 100, according to the filing.

Since filing for bankruptcy, Celsius has clashed with its clients on multiple occasions. In early August, a 400 Celsius user group demanded a return of $ 180 million in the Celsius custody program.

Soon after, the unsecured creditors of Celsius, a group representing user interests, accused Celsius CEO Alex Mashinsky of misleading customers by assuring them that their funds were “safe” in the days leading up to the suspension. of withdrawals.

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