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Celsius Network to Return Only 22% of Customer Funds

Remmy Bahati - BeInCrypto
2022-09-02 04:32
Embattled cryptocurrency lender Celsius Network has told a New York bankruptcy court in a filing that it will pay back about 22% of funds held in custody to 58,300 customers whose assets are assets valued at $48M.
The revelation was made during a Sept. 1 hearing of a motion seeking authorization for the Celsius Network debtors to reopen withdrawals for customers whose assets are held in custody.
“We’re not foreclosing the possibility that we’ll be back before you seeking to release all of the custody funds, [which] may be subject to clawback claims. We’re just not there yet,” said Ross Kwasteniet, a partner with Kirkland and Ellis representing Celsius.

$4.3 billion in debt

The amount said to be held in custody is about $200-$215 million according to Celsius attorneys, who also detailed steps that the company is exploring to protect the assets it currently has. These include halting new loans, coin swaps, and transfers, and suspending its staking programs.
The bankruptcy filing revealed that Celsius owes its users around $4.3 billion, leaving many wondering whether it will raise more liquidity to pay the remaining funds as it seeks to restructure and go through bankruptcy proceedings.
“Following their analysis, the Debtors have identified significant cryptocurrency assets that they do not believe are property of their estates, and as to which the Debtors do not believe that they have any colorable causes of action under applicable law,” the filing said.

Celsius sued ex-manager to recover ‘stolen’ funds

In a related development, Celsius filed a lawsuit against its ex-investment manager and firm, Jason Stone and KeyFi Inc., seeking disgorgement of millions of dollars in assets and return of company property after leaving the company. It is also engaging unsecured creditors to explore financing options.
According to the bankruptcy filing, the firm was valued at $3 billion after raising $690 million in multiple funding round series in 2022.
The post Celsius Network to Return Only 22% of Customer Funds appeared first on BeInCrypto.
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