On March 21, United States Bankruptcy Judge Martin Glenn approved a settlement plan concerning the bankruptcy case of the crypto lending platform Celsius Network. The agreement grants custody account holders the right to receive 72.5% of their crypto holdings, provided they approve of the settlement. In addition, those who accept this settlement will not be able to pursue further litigation or claims against the debtors. Celsius and its debtors will control any digital assets not included in the settlement.
The recent settlement between Celsius’ unsecured creditors, debtors, and an ad hoc group of account holders is the latest development in the defunct platform’s Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York since it filed for bankruptcy protection in July last year. In February 2023, NovaWulf Digital Management was appointed as a restructuring plan sponsor, under which more than 85% of customers are expected to recover around 70% of their crypto assets. In addition, Judge Glenn previously determined that over $4 billion in funds from Celsius’ interest-bearing Earn program belonged to the lending platform.
However, in December 2022, the court ordered roughly $44 million worth of crypto returned to customers. In addition, in February 2023, the judge allowed Celsius debtors to sell $7.4 million worth of Bitmain coupons if necessary.
As the 2022 market crash unfolds, bankruptcy proceedings are ongoing in U.S. courts against major crypto firms such as Signature, Silicon Valley, and Silvergate Bank. In addition, on March 17, it was reported that there was a $7 billion gap between assets held by FTX’s debtors and their claims.