The bankrupt Celsius Network, as part of the asset recovery program for clients, intends to unlock and return the funds of some users who stored cryptocurrencies on the platform through the court.
The crypto lender has filed an application with the Southern District of New York court for the transfer of assets to the owners of funds placed on wallets for long-term storage only. To do this, Celsius will release $50 million worth of assets to unlock about $50 million of the more than $225 million held in users’ wallets.
The unfrozen money will be returned only to this group of site clients, the rest, whose assets are stored on deposits with annual earnings in cryptocurrency or supporting a lending mechanism, including Earn and Borrow accounts, until they can return the money. The company’s lawyers clarified that clients who transferred their assets from other Celsius accounts, such as Earn and Borrow (Earn and Credit), to the custody program 90 days before filing for bankruptcy of the company, will also not be able to receive their assets.
If the petition is approved, the assets will be returned only to those users who have kept cryptocurrencies in custodial wallets for more than 90 days since the bankruptcy of Celsius. The division of account holders who can get their money back and who cannot yet claim assets has been affected by disputes over which digital assets belong to customers and which are part of the company’s property in bankruptcy proceedings. The company acknowledged in a statement that most customers are unlikely to support the new arrangement:
“Solicitation is the first, but not the last, step in returning assets to clients where possible. At the same time, without jeopardizing the efforts of debtors to maximize value and distribute this value as fairly as possible among all customers.
Recently, the Celsius legal team stated that when clients deposited assets on the platform, they transferred ownership of their cryptocurrencies to the company. In other words, almost 80% of the user equity on the platform is owned by Celsius, as most of the assets are held in Earn and Borrow accounts.
Source: Bits
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