Celsius Customers Will Receive Up to 72.5% of Their Crypto Back

Due to a landmark decision by Justice Martin Glenn, the courts have ruled that Celsius customers can receive up to 72.5% of their deposited crypto back, although the refund would not be instant in all cases.

Refund for Custody Accounts

The deal would only apply to Custody account holders. Nearly 600,000 Earn such investors would not benefit, as the court decided back in January that Earn account holders signed over their crypto to Celsius. This decision granted the failed crypto lender ownership of up to $4.2 billion worth of assets, $23 million of which were stablecoins.

To put that into perspective, when Celsius filed for bankruptcy, the company only had about $167 million worth of liquidity. It also claimed to have about $4.3 billion in assets with $5.5 billion in liabilities, $4.7 billion of which were debts to customers or, as Celsius put it, unsecured creditors.

Judge Glenn’s January ruling effectively cut Celsius’ liabilities down to about $1.3 billion. Furthermore, nearly $144 million in legal fees have also been effectively subsidized by customer deposits, adding insult to injury.
The remaining Earn customers will now have a choice between either getting almost three-quarters of their money back or pursuing further litigation.

Half Up Front, Half By 2024

While those who wish to pursue their claims against Celsius to get all their money back are free to do so, those who want to get back at least some of their assets can now file refund requests. 36.5% of crypto deposits will be refunded on the spot, with the remaining 36.5% to be paid out “upon plan resolution” or by the end of the year.

Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).

— Cam Crews (@camcrews) March 21, 2023

Customers who choose the court-approved refund plan have 30 days to voluntarily opt into the settlement.

“Custody Account Holders, including those with an outstanding loan owed to the Debtors through the Debtors’ Borrow Program, shall be afforded an opportunity to opt-in to the Settlement within 30 days […] of the entry of the Order in accordance with the procedures detailed […]. Once the Settlement is approved, the Debtors will be authorized to distribute to all Eligible Users the entire balance of their Withdrawable Custody Assets. “

The refund process will be sponsored by NovaWulf Digital Management, who will also provide equity in a new company, NewCo, for illiquid assets to the Earn customers who have been stiffed in the deal.

The post Celsius Customers Will Receive Up to 72.5% of Their Crypto Back appeared first on CryptoPotato.