Celsius Custody Customers Begin to Withdraw Funds

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  • Celsius Custody customers have started to withdraw their funds 263 days after the platform froze withdrawals
  • The bankruptcy court awarded Custody customers $44 million in withdrawal funds in December
  • Celsius is in the process of being bought out by Novawulf Digital Management

Celsius Custody customers are now able to request withdrawals of some of their funds, marking the first time that funds have left the platform in this manner for over 260 days. Celsius announced yesterday that “Distributable Assets in certain Custody Accounts” were able to be withdrawn, although the process hasn’t started smoothly, with customers reporting delays and others saying they were not presented with the option to withdraw.

Judge Ringfenced $44 Million for Custody Customers

Celsius Custody users have had a better time than most caught up in the crypto contagion fallout that had hit the market over the past year or so, given the slightly different way in which their funds have been categorized. In December the bankruptcy judge in charge of the Celsius case, Judge Martin Glenn, ruled that holders of tokens in Celsius’ Custody and Withhold accounts could withdraw their holdings and ringfenced $44 million for the purpose.

At the time, Judge Glenn said that he wanted creditors to “recover as much as they possibly can as soon as they possibly can”, and this has finally come to fruition. Celsius tweeted yesterday that it had been given permission to allow withdrawals for customers with “Pure” Custody Account Assets (i.e. those that never earned interest) and “Transferred” Custody Assets: (i.e. assets that were transferred from the Earn or Borrow Program into the Custody Program in the 90 days before Celsius filed for chapter 11 bankruptcy on July 13, 2022.).

Users Experiencing Delays

While some reported that they had got their funds out in full, others complained that they saw no option to withdraw when they initiated the process. Some of those that did reported waiting for hours for their request to be honored, suggesting that there is (rather unsurprisingly) a backlog of withdrawal requests.

Celsius agreed a takeover by Novawulf Digital Management two weeks ago, which should see the vast majority of Celsius customers getting around 70% of their holdings back upon completion of the deal.