In a hearing on Dec. 7, bankruptcy judge Martin Glenn ordered the beleaguered crypto lending firm to return funds that were not part of its yielding accounts.
The total is about $44 million, a tiny fraction of the billions in cryptocurrency still owed to Celsius customers, according to Bloomberg.
“I want this case to move forward,” the judge said, before adding, “I want the creditors to come back as quickly as possible.”
Celsius Network entered voluntary Chapter 11 bankruptcy protection in July after a month of severe liquidity problems in the wake of the Terra/Luna crash.
Celsius mutual funds are moving
Celsius’ advisors and stakeholders have determined that the cryptocurrency placed in the collateral is the property of the users and not the company. What happens to the money left in the interest-bearing accounts is yet to be determined.
The report added that Celsius had about $200 million in escrow accounts, but much of it was moved there from yield-producing accounts before filing for bankruptcy.
As part of the proceedings, Celsius may be able to claim ownership of a portion of it due to favorable transfer rules, Bloomberg reported. There was about $11 million in that category, according to court documents.
On December 6, Celsius won an extension of its exclusivity period for the right to file its Chapter 11 reorganization plan through February 15. The company stated:
“We intend to use this time to further develop a freelance business plan as we explore all value maximization opportunities available to us, for the benefit of our customers and other stakeholders.”
This afternoon, the court agreed to extend our exclusivity through 15/15/2023. This is the period during which Celsius has the exclusive right to file a Chapter 11 reorganization plan. We thank UCC and the ad hoc groups for their cooperation on this matter.
– Celsius (@CelsiusNetwork) December 6, 2022
In its bankruptcy filing, Celsius revealed that it had between $1 billion and $10 billion in debt and more than 100,000 creditors.
On December 2, Mike Novogratz’s Galaxy Digital announced that it would acquire Celsius’s GK8-owned warehouse platform, which would be sold as part of bankruptcy proceedings.
Crypto market downturn
Cryptocurrency markets are still falling this week even though they have been range bound since the FTX crash in early November.
The total market capitalization is down 1.7% to $876 billion at the time of writing, according to CoinGecko. Bitcoin and Ethereum are leading losses even though they are both in a period of consolidation.
Celsius Network CEL token is up 9% on the news and is trading at $0.752 at the time of writing.
The post requesting the return of a customer’s $44 million in cryptocurrency appeared first on CryptoPotato.