Celsius Begins Allowing Withdrawals for Some Users
Celsius, a crypto lending platform that previously filed for bankruptcy, has announced that it is now enabling withdrawals for certain users. According to a court document, customers who are part of the Custody Program and hold “Class 6A General Custody Claims” and/or “Class 6B Withdrawable Custody Claims” can start withdrawing their funds from the platform starting around November 29th. They have until February 28th to complete their transactions.
If you meet the qualifications, you will be able to withdraw 72.5% of your crypto holdings, minus transaction fees, as long as you did not previously participate in a custody settlement. However, customers who voted against the reorganization plan will not be eligible for this distribution. Their funds will be pooled in a segregated wallet managed by the Litigation Administrator for the next six months.
Some users have already encountered difficulties when attempting to withdraw their funds and have voiced their concerns on social media.
Celsius Emerges from Bankruptcy
Celsius filed for bankruptcy in July 2022. In March, a settlement plan was approved by the court, allowing users with deposited crypto on Celsius to receive 72.5% of their funds in two installments throughout 2023.
In September, creditors approved a reorganization plan that permitted the distribution of approximately $2 billion worth of bitcoin and ether from the bankruptcy estate. Celsius’ equity was transferred to NewCo, managed by the Fahrenheit consortium, which had successfully acquired the bankrupt company. NewCo intends to shift its focus towards crypto mining and staking. The plan received approval from the judge on November 9th.
Legal Troubles and Settlements
Aside from its bankruptcy filing, Celsius and its CEO Alex Mashinsky faced legal action from the SEC, FTC, and CFTC for allegedly misleading customers. Mashinsky was also charged with fraud. Celsius promptly settled with the FTC, agreeing to pay $4.7 billion once the bankruptcy proceedings conclude.
Mashinsky’s criminal trial is scheduled to begin next fall.
Hot Take: Celsius Restores Trust as It Allows Withdrawals After Bankruptcy
Celsius’ decision to enable withdrawals for certain users marks a significant step towards restoring trust in the platform following its bankruptcy filing. By allowing customers to access their funds, Celsius demonstrates its commitment to fulfilling its obligations and rebuilding its reputation. While some users have experienced difficulties during the withdrawal process, it is crucial for Celsius to address these issues promptly to ensure a smooth experience for all users.
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