Celsius, a cryptocurrency lending platform, has announced that certain users will be allowed to receive 100% of their original cash more than 300 days after the platform froze withdrawals.
Celsius announced on May 4 that, subject to court clearance, eligible customers would be able to withdraw the remaining 6% of Distributable Custody Assets from the platform. Until January, the same users, primarily those who had only ever had funds in custody accounts, could only withdraw up to 94% of their funds.
Celsius users granted access to some assets
The announcement marked a step forward in reimbursing some Celsius customers for lost funds for the first time since the business suspended withdrawals in June 2022 and then filed for bankruptcy in July. Despite the funds apparently being available, several Celsius customers claimed a backlog of withdrawal requests, with some alleging requests, took days to process.
Customers who have already transferred funds from an earned or borrowed account to a custodial account may withdraw 72.5% of their funds up to a limit of $7,575.
According to court records, the crypto entity was trying to merge its UK and US corporations in order to have the two treated equally in bankruptcy proceedings. The New York Attorney General’s office also filed a lawsuit against the entity’s founder and former CEO Alex Mashinsky in January. On May 2, Mashinsky filed a motion to dismiss, arguing that the AG’s case “parrots misinformation.”
What is the way moving forward?
The crypto entity is now permitted to distribute 100% of each eligible user’s Distributable Custodial Assets, minus transaction fees. On 21 March 2023, the Court approved Celsius’s Custody Claims Settlement with the Ad Hoc Custodian Account Holders Group and the Commission.
Celsius has notified all eligible customers via email and in-app alerts. The Distribution Schedule specifies the list of consumers who are eligible for withdrawals.
For security and regulatory reasons, eligible users will be requested to update their C account with certain relevant information before any withdrawals are processed. The Celsius app will keep you up to speed on all the information you require.
Since June, customer assets have been frozen in withdrawals, and the business owes its 1.7 million consumers around $4,7 billion.
Following the Terra/Luna meltdown, the lending platform was one of the first large crypto firms to declare bankruptcy. Its previous CEO, Alex Mashinsky, is being sued by the General. Letitia James, a New York attorney, claims he scammed hundreds of thousands of investors out of billions of dollars. Mashinsky continues to deny all claims.
1. Is a withdrawal a one-time event, or can I withdraw multiple times?
Eligible Users are able to process as many withdrawals, up to the permitted withdrawal amount, as needed, as long as their eligible balance is sufficient to cover the cost of the transaction.
2. What should I do if I am not currently in a location where I can access my Celsius app?
Data and asset security remain the company’s top priority, and you may not be able to access the Celsius app from your current location. The entity asks that you attempt to withdraw your eligible digital assets once you are back in an area where access to Celsius is permitted or contact customer care for support.
3. What happens if I don’t want to withdraw my digital assets?
It is the Eligible User’s responsibility to withdraw their digital assets. If assets are not withdrawn, they will remain on the Celsius platform subject to future decisions made by the Court.