Celsius Network Ltd., which has filed for Chapter 11 bankruptcy, has filed a motion to return around US$50 million worth of tokens to a portion of holders as these funds are not part of the bankruptcy estate, unlike funds from Earn and Borrow clients. The hearing on the filing will take place on Oct. 6.
See related article: Celsius on thin ice well before its bankruptcy: CNBC report
Fast facts
- “The Debtors have identified significant cryptocurrency assets that they do not believe are property of their estates, (…) Accordingly, the Debtors believe it is fair and appropriate to permit customers to withdraw those cryptocurrency assets at this time,” the filing said.
- Only customers with assets worth US$7,575 or less in Celsius’ Custody and Withhold Accounts, used for storage but not generating any returns, will be eligible.
- Nearly 65,000 users hold assets in Custody and Withhold Accounts worth approximately US$225 million, but Celsius is only releasing around US$50 million in what they call “Pure Custody” and “Pure Withhold” accounts.
- Celsius says that customers with assets that were in or transferred from Borrow and Earn Programs will not receive returns.
- On Wednesday, a group of 64 customers that hold more than US$22.5 million in custody accounts has asked the court in charge of the company’s bankruptcy case to allow withdrawals of assets from their accounts.
- Celsius filed for bankruptcy in July after halting withdrawals in June, citing market conditions. According to its bankruptcy filing, the company owes over 100,000 creditors around US$4.7 billion worth of assets.
See related article: Celsius files for bankruptcy after closing DeFi loans