Celsius Firm Declares Intent to Recoup Pre-Bankruptcy Withdrawals

Crypto News- Celsius, the crypto lending platform that faced bankruptcy in July 2022, is now making efforts to recover funds from creditors who withdrew substantial amounts just before the bankruptcy filing. Bankruptcy administrators have taken a step to notify creditors that those who withdrew more than $100,000 in the 90 days leading up to the bankruptcy may be required to return a portion of those funds or face legal consequences.

Celsius Firm Declares Intent to Recoup Pre-Bankruptcy Withdrawals

In a recent filing, it was revealed that account holders with “withdrawal preference exposure” exceeding $100,000, meeting specific criteria, have the option to settle their liability by paying 27.5% of the withdrawn funds by January 31, 2024. To initiate the settlement process, interested parties must submit an election form by January 25.

In exchange for settling, account holders will be granted a release from avoidance actions and distributions under the reorganization plan. However, those who fail to settle by the deadline risk having their withdrawal preference exposure addressed by administrators, potentially leading to legal actions to recover the withdrawn funds.

Celsius Seeks Repayment from Large Creditors Post-Bankruptcy

Celsius administrators have been actively managing the aftermath of the bankruptcy, allowing eligible participants to withdraw some of their cryptocurrency holdings. Additionally, the company has been unstaking and withdrawing Ethereum, which currently constitutes 20.3% of the withdrawal queue, valued at approximately $266 million.

As part of its post-bankruptcy strategy, Celsius has announced a scaled-back approach focusing on Bitcoin mining, which received approval from the presiding judge in December 2023. The company aims to make timely distributions to creditors, prioritizing stability and recovery in the aftermath of its financial challenges.