- Most Celsius creditors will be able to get 72.5% of their funds back according to a court-approved proposal
- The proposal prohibits them from taking legal action against Celsius
- The remaining 15% are in a more precarious position
Most Celsius creditors will receive over 72.5% of their funds back, provided they don’t try to sue the company, according to a court-approved proposal. United States Bankruptcy Judge Martin Glenn yesterday signed off on the proposal, which promises former users almost three quarters of their funds back but means that they cannot “pursue any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action”. Digital assets not part of the settlement will still be controlled by the Celsius debtors, and creditors have 30 days to review and accept or reject the proposal.
Relief for Most Investors
Yesterday’s ruling was the most recent development in the case of the lending platform that filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York last July, and involves a settlement among the committee of unsecured creditors, Celsius debtors, and an ad hoc group of account holders. The news will be a huge relief to creditors, who would have feared since the platform’s collapse that they would get nothing back.
Novawulf Takeover Progresses
In February, the platform, which has tried but failed to re-launch under new guises, announced that Novawulf Digital Management would serve as a sponsor for its restructuring plan, enabling over 85% of Celsius customers to recover about 70% of their cryptocurrency. The remaining 15% are in a more precarious positions, classed as ‘unsecured creditors’, including those who were former members of the platform’s interest-bearing protocols, such as Celsius Earn. in January, Judge Glenn declared that these funds, worth more than $4 billion, belonged to the lending platform.
