Consultants overseeing the liquidation of Celsius Network LLC have demanded a return of $2 billion from significant clients.
According to a Bloomberg report, the committee formed during the bankruptcy case demands the return of assets that Celsius’s major clients withdrew from the crypto platform shortly before it filed for bankruptcy. This will avoid possible litigation.
Advisors began contacting clients who had withdrawn more than $100,000 from the platform in the lead-up to the company’s bankruptcy. The assets recovered through this process will help repay creditors who have yet to withdraw funds from Celsius.
“The committee is giving customers the option to settle their potential liabilities based on what their assets were worth when they made withdraws in 2022, meaning settling customers would retain any appreciation of their digital assets experienced over the past year thanks to surging crypto prices.”
Bloomberg report
The recovery process will only affect about 2% of Celsius users, who collectively withdrew roughly 40% of the platform’s assets 90 days before the company filed for Chapter 11. At the time of the bankruptcy filing, Celsius said it had $6 billion in crypto assets, 1.7 million registered users, and 300,000 active users with account balances over $100.
In mid-August 2022, Celsius Network’s debts exceeded its assets by $2.85 billion. The amount of funds missing from the platform to pay creditors was almost 2.5 times greater than stated when filing for bankruptcy, when the shortage of funds was estimated at $1.2 billion.
Celsius Network’s creditors developed a plan to reorganize the company, which most account holders approved. The plan calls for the distribution of more than $3 billion in cryptocurrency and fiat funds to creditors.
