Celsius Grants Access to Withdrawals for Eligible Crypto Holders

Celsius Grants Access to Withdrawals for Eligible Crypto Holders – Celsius, a cryptocurrency lending platform facing bankruptcy, has initiated withdrawals for specific users, marking a pivotal moment amidst the company’s financial instability and legal challenges. According to a filing in the United States Bankruptcy Court for the Southern District of New York, participants in its custody program falling under “Class 6A General Custody Claims” and “Class 6B Withdrawable Custody Claims” are now eligible for fund withdrawals.

With a deadline for withdrawals set for Feb. 28, 2024. Those qualified to participate can withdraw 72.5% of their cryptocurrency holdings, excluding transaction fees. Customers who objected to the reorganization plan are excluded, with a litigation administrator managing their assets independently for six months. After filing for bankruptcy in July 2022, the platform has faced numerous legal challenges. 

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In March, an approved settlement plan committed to providing deposit account holders with 72.5% of their funds in two installments during 2023. In a later development, creditors endorsed the firm’s reorganization plan in September, facilitating the distribution of approximately $2 billion in Bitcoin and Ether. The company’s equity is set to transfer to NewCo, supervised by the Fahrenheit consortium. In a November 20 announcement, Celsius stated that the primary focus of the NewCo, as proposed in its restructuring plan, will shift from staking to Bitcoin mining. 

Celsius has been navigating bankruptcy proceedings and legal hurdles involving various regulatory bodies, including the U.S. Securities and Exchange Commission, the Federal Trade Commission (FTC), and the Commodity Futures Trading Commission. Lawsuits have been filed against the company and its CEO, Alex Mashinsky, primarily focusing on allegations of customer deception. Despite Celsius reaching a $4.7 billion settlement with the FTC, Mashinsky is set to face a criminal trial.

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