Celsius starts to open crypto withdrawals for holders of some claims
Quick Take
- Owners of some deposit accounts at Celsius will be able to withdraw 72.5% of their claims, minus transaction fees, a bankruptcy court announced.
- Withdrawals can be made until Feb. 28, 2024.
Celsius, a crypto lender that filed for bankruptcy last summer, is starting to open withdrawals to some users.
Customers of the Custody Program, who are holders of "Class 6A General Custody Claims' and/or Class 6B Withdrawable Custody Claims," can start withdrawing their funds from the platform "on or around" Nov. 29, according to a court document. They have until Feb. 28 to make the transactions.
Qualifying users will be able to withdraw 72.5% of their crypto, minus transaction fees, if they didn't previously participate in a custody settlement. Customers who voted to reject the reorganization plan will not participate in this distribution, and their funds will be pooled in a segregated wallet and managed by the Litigation Administrator over the following six months, the document says.
Some users have already tried to withdraw and complained they had trouble logging in, according to posts on X.
Around 58,300 users hold what the court classified as "custody assets" worth about $210 million, according to a September court filing.
Out of bankruptcy
Celsius filed for bankruptcy in July 2022. In March, the court approved a settlement plan allowing users who held crypto with Celsius in deposit accounts to get 72.5% of their funds in two payments over the course of 2023.
In September, creditors approved the reorganization plan, allowing the bankruptcy estate to distribute around $2 billion worth of bitcoin and ether. The equity of Celsius, in turn, was cleared to be transferred to NewCo, managed by the Fahrenheit consortium, which won the bid to acquire the bankrupt company in May. Farenheit plans to pivot the new company to crypto mining and staking. The judge approved the plan on Nov. 9.
Celsius and its founder and CEO Alex Mashinsky were also sued by the SEC, FTC and CFTC this summer for misleading customers. Mashinsky was also charged with fraud. Celsius promptly settled with the FTC, agreeing to pay $4.7 billion after the bankruptcy proceedings are over.
The criminal trial for Mashinsky is scheduled to start next fall.
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