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Celsius Custody Accounts to Receive 72.5% Crypto Back

Custody Settlement Achieved 

A settlement plan was approved by a bankruptcy judge for Celsius Network, a crypto lending platform that filed for chapter 11 in June 2022. The plan allows custody account holders, who had deposited their crypto assets with Celsius for safekeeping, to receive 72.5% of their crypto holdings back. The custody account holders have to opt in to the deal by April 15, 2023, and agree not to pursue any litigation against Celsius or its affiliates. 


100% Back for Custody?

The plan also requires Celsius to transfer the remaining 27.5% of the custody account holdings to a separate litigation trust that will be managed by a trustee appointed by the court. The trustee will try to recover as much value as possible from the assets and distribute it to the creditors and claimants of Celsius.


What Happened to Celsius

Celsius filed for bankruptcy after suffering a series of market making fear campaigns followed by an illegal counterfeit attack on the company's CEL Treasury all allegedly from FTX/Alameda Research. This alleged market making (known as manipulation) against Celsius damaged its reputation and spooked customers to bank run the platform.


Behind the Vision

Celsius was founded in 2017 by Alex Mashinsky, an entrepreneur and inventor of Voice over Internet Protocol (VoIP). Celsius had over 1 million users and $20 billion in assets under management as of May 2022. Celsius had partnered with several custodians, such as BitGo, Fireblocks and Prime Trust, to provide secure storage for its customers' crypto assets.


In Conclusion

Some custody account holders have already started withdrawing their crypto assets from Celsius, while others are waiting for more clarity on the settlement plan and the future of the company.




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