Celsius Debt Management: Customers to Receive 27.5% of Withdrawn Funds

Legal Actions for Large Withdrawals

Celsius' bankruptcy managers are taking legal steps against customers who withdrew substantial amounts from the crypto lender within 90 days prior to the bankruptcy announcement. A notification on Tuesday highlighted this action, targeting those who withdrew more than $100,000 before July 12, 2022.

Settlement Instructions via Email

At the United States Bankruptcy Court of the Southern District of New York, managers have disclosed that customers will receive emails detailing how to address their outstanding debts. This email will guide customers on a 27.5% settlement of their withdrawn amounts during the specified period. Following this procedure, customers could benefit from upcoming distributions under the company's restructuring plan.

Criteria for Email Recipients

Beyond the specific withdrawal amount, the filing clarified that recipients of the settlement email would include those who neither opposed the restructuring plan nor made any claims against it. These individuals have also not chosen to opt out of certain releases within the reorganization proposal.

Deadline for Resolving Exposure

Account holders with withdrawal preferences are given until January 25 to declare their intentions. This can be done by submitting an Election Form, and any associated settlement payments must be made by January 31, 2024.

Celsius' Bankruptcy Context

Facing a significant $1.2 billion shortfall in its financial records, Celsius declared bankruptcy on July 13, 2022. By September 2023, creditors endorsed a restructuring strategy that promises 72.5% repayment to Bitcoin and Ether custodial account holders. Concurrently, interest-earning account holders will receive a mix of cryptocurrency and stakes in a nascent mining enterprise, derived from Celsius' residual assets.