Celsius Targets Former Clients in Bankruptcy Case
Celsius, the platform that recently shifted its focus to Bitcoin mining after its bankruptcy plan was approved, has sparked controversy by going after former clients who withdrew funds before the company’s bankruptcy declaration.
A Bold Proposal for Bankruptcy
In a notice submitted by Kirkland & Ellis on behalf of Celsius, it is stated that users who withdrew more than $100,000 from the platform in the 90 days prior to the bankruptcy must resolve their outstanding liability or face litigation.
The lawyers have labeled these withdrawals as “avoidance actions” and claim that 27.5% of the withdrawn amount must be returned by January 31st or face clawbacks.
Payouts to Creditors Will Commence Soon
The notice is part of the preparations to repay creditors as per the restructuring agreement. It aims to allow users who withdrew a significant amount but still had assets trapped on the platform to receive some of the distributed funds.
However, the enforceability of this clawback measure may be challenged in court, and it remains to be seen whether other bankrupt platforms will follow suit.
Hot Take: Controversy Surrounds Celsius’ Actions
Celsius’ attempt to recoup funds from former clients who withdrew before the bankruptcy has raised concerns and may face legal challenges. While this move could set a precedent for other bankrupt platforms, its success and enforceability remain uncertain. The ongoing battle between Celsius and its former users highlights the complexities surrounding bankruptcy cases in the crypto industry.
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