Celsius Network Will Only Return 22% Of The Funds To Its Customers
✍️ 3 September, 2022 - 7:03 👤 Editor: Jakub Motyka
- Celsius Network filed for bankruptcy due to a terrible insolvency crisis.
- It will return 48 million dollars to its clients, which represents only 22% of the total. The restructuring of the Celsius funds has given much to talk about among its creditors.
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The cryptocurrency lending company, Celsius Network, assured that it will return around 48 million dollars of the funds of its clients. The announcement was made during a court bankruptcy appearance in New York this September 1. During it they have authorized debtors to reopen withdrawals. In this way, they agreed to distribute the equivalent of 22% of the total among a minority of their 58,300 users, whose funds are in the custody of the exchange.
Let's remember that Celsius Network was one of the companies most affected as a result of everything related to the fall of the Terra ecosystem. Protected by Chapter 11 of the United States Bankruptcy Law, the exchange has done everything possible to redistribute its capital and pay its creditors.
Celsius' Debt To Its Users
According to Celsius's lawyers, the funds in custody of the exchange are approximately USD 215 million. In turn, they pointed out that the company is looking for different ways to protect the assets they currently have. This includes stopping new loans, currency swaps and transfers, and suspending the staking program.
However, within the motion they only talk about custody and retention accounts for assets in custody for a value of USD 7,575 or less. This does not include amounts greater than USD 7,375, or funds transferred to the Earn and Borrow program. Due to the new restructuring of the platform's assets, measures have been taken to secure the funds.
The Restructuring Of The Celsius Network Funds
The Celsius platform has restructured its custody and retention accounts so that its users can maintain legal ownership of cryptocurrencies. However, this does not extend to locked assets that offer annual cryptocurrency earnings or lending services. In other words, the assets blocked by the Earn and Borrow program are the property of the Exchange. In a nutshell, the movement of these assets represents "a transfer of ownership between the debtor and the client."
Despite conflicting opinions among Celsius clients and creditors, the company assures that this is only “a first step”. The exchange has repeatedly pledged to do everything possible to return assets to customers.
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