Celsius

Bitcoin

<p><a href="https://www.cryptopolitan.com/celsius-initiates-asset-recall-and-rebalance/" rel="noopener noreferrer nofollow">Celsius</a>, the cryptocurrency lending platform, has notified its creditors who withdrew substantial amounts from their accounts before its bankruptcy filing. This move is part of the company’s efforts to manage its financial crisis following a tumultuous period in the crypto market.</p>
<h2 class="wp-block-heading" id="strong-celsius-enforces-a-27-5-return-on-big-withdrawals-strong"><strong>Celsius enforces a 27.5% return on big withdrawals</strong></h2>
<p>Celsius management has informed creditors that those who withdrew more than $100,000 within 90 days of the company’s bankruptcy declaration on July 13, 2022, may face legal actions if they do not comply with the new directive. According to the notice, these account holders must return 27.5% of the funds they withdrew during this period. Compliance with this request will make them eligible for future distributions per Celsius’ reorganization plan.</p>
<p>Alan R. Rosenberg, a partner at Markowitz Ringel Trusty &amp; Hartog law firm, explained that this notice targets individuals with preference exposure above $100,000. He clarified that these individuals must either settle with the estate for 27.5% of the withdrawn amount to avoid legal action or vote to accept the reorganization plan without opting out of the releases.</p>
<h2 class="wp-block-heading" id="strong-implications-for-smaller-withdrawals-and-the-company-s-future-strong"><strong>Implications for smaller withdrawals and the company’s future</strong></h2>
<p>Account holders who withdrew less than $100,000 are not required to return their funds. However, Rosenberg noted they still need to vote to accept the reorganization plan and not opt out of its releases. This differentiation underlines Celsius’ approach to managing its bankruptcy proceedings and its efforts to stabilize its financial position.</p>
<p>Celsius’ journey through bankruptcy has been complex. The company declared bankruptcy on July 13, 2022, after revealing a $1.2 billion deficit in its balance sheet. In September 2023, creditors approved a reorganization plan that proposed that holders of custodial accounts would receive 72.5% of their holdings in Bitcoin and Ether. Those with interest-earning accounts would receive a combination of cryptocurrency and shares in a new mining company formed from Celsius’ remaining assets. The company emerged from bankruptcy in November and resumed withdrawals for eligible creditors.</p>
<p>Furthermore, Celsius and its CEO <a href="https://www.cryptopolitan.com/celsius-alex-mashinsky-reportedly-arrested/" rel="noopener noreferrer nofollow">Alex Mashinsky</a> faced legal challenges, including lawsuits from the SEC, FTC, and CFTC, primarily for misleading customers. Mashinsky was charged with fraud, with his trial set for the following fall. As part of a settlement with the FTC, Celsius agreed to a $4.7 billion payment, contingent upon the completion of its bankruptcy proceedings.</p>
<p><br>The <a href="https://cases.stretto.com/public/x191/11749/PLEADINGS/1174901092480000000030.pdf" rel="noopener noreferrer nofollow" target="_blank">recent notice </a>to creditors marks a critical step in Celsius’ ongoing efforts to navigate its financial difficulties and fulfill its obligations under the approved reorganization plan. Celsius is working towards a more equitable resolution for all its creditors by addressing the large withdrawals made in the lead-up to its bankruptcy. This move is also indicative of the broader challenges faced by the cryptocurrency industry, especially regarding regulatory compliance and financial stability.</p>

Celsius demands 27.5% back from large pre-bankruptcy withdrawals

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