Celsius revealed its intention to recover funds from customers who withdrew $100,000 or more in the 90 days before its bankruptcy filing.
Creditors who withdrew significant sums from Celsius before the bankruptcy declaration might face legal action if they don’t return part of the funds, according to the bankruptcy administrators’ notification on January 9.
The notification stated that account holders who withdrew over $100,000 within 90 days before the bankruptcy filing might need to return those funds, with an option to settle by paying 27.5% of the withdrawn amount by January 31, 2024.
Account holders opting for settlement were assured relief from potential legal claims related to their withdrawals and eligibility for distributions under the reorganization plan.
For those not settling by the deadline, the administrators would address their withdrawal exposure, potentially involving legal action to recover amounts exceeding the specified threshold.
“Any Withdrawal Preference Exposure that is not settled by January 31, 2024, will be addressed by the Litigation Administrator after the Effective Date through separate correspondence or other action,” the filing stated.
In a significant development in late November 2023, Celsius administrators granted eligible account holders partial access to cryptocurrency holdings.
Celsius has been unstacking and withdrawing Ethereum from relevant accounts in preparation for timely distributions to creditors. Approximately 20.3% of the withdrawal queue consists of Ethereum, totaling around 112,037 Ether worth approximately $266 million, according to Nansen data.
In November 2023, the firm shifted its focus to Bitcoin mining as part of a revised post-bankruptcy strategy approved by the overseeing judge at the end of December.
In the unfolding drama of Celsius’s financial repositioning, the company’s actions continue to be shaped by a dynamic interplay of regulatory dynamics, creditor demands, and strategic considerations in the ever-evolving crypto landscape.
Read also: Nigeria’s Central Bank approves Africa Stablecoin Consortium to pilot Naira Stablecoin (cNGN)
