- Judge Martin Glenn ordered the return of $44 million held by Celsius back to its customers.
- Celsius claims the right to funds transferred to its “Earn and Borrow Program” account due to customers’ agreement to terms of service.
- Judge approves of Celsius’ filing for $2.8 million KERP payment.
The crypto industry may be on its path to shedding off the icy fingers on its shoulders from the crypto winter. Recently, the market saw a change in Bitcoin (BTC) as the price of BTC currently fluctuates between $16,000 and $17,000.
In the same vein, a few customers of the now-bankrupt crypto lender, Celsius, are eligible to receive their funds held by Celsius’ “Pure Custody” account since the crypto company filed for Chapter 11 bankruptcy back in July.
In September, Celsius moved to reopen its withdrawals for customers who had kept their funds saved in a specific account. This opening was only eligible for the company’s 15,680 customers, who had roughly $44 million in Celsius’ Pure Custody account.
Regarding the court ruling, which U.S. Judge Martin Glenn verbally delivered, Celsius has been ordered to release 100% of the $44 million back to its customers. However, this amount is only a tiny percentage of the billions of dollars the crypto lender, Celsius, owes its investors and users.
“I want this case to move forward. I want creditors to recover as much as they possibly can, as soon as possible,” Judge Martin Glenn said at the court hearing.
This order by the judge became actualized due to Celsius’ numerous stakeholders and advisers who believed that funds kept in the Pure Custody account should be returned to owners instead of Celsius.
According to Bloomberg, Celsius reportedly had over $200 million in assets in custody accounts back in September. However, most of the assets had been transferred, meaning that Celsius could claim ownership of these crypto assets due to its customers agreeing to its terms of service.
Judge Glenn did not give the order to release these $200 million assets at the hearing except for the transfers being less than $7,500. In a September tweet Simon Dixon, the CEO of BnkToTheFutute.com, wrote that about $50 million of the $210 million with Celsius would be released to 15,680 from the total 58,300 customers.
Celsius had mentioned that funds transferred from its “Earn and Borrow Program” would not be included in the release to its customers, as only those who never interacted with Celsius’ Earn accounts and have kept their assets in the pure custody accounts would be refunded.
While $44 million will be dispensed to eligible Celsius customers, most of the company’s user funds ($4.7 billion) remain locked. However, in a December 5 report by Bloomberg, Celsius allegedly aimed to sell $18 million stablecoins in its Earn accounts solely for its reorganization as Judge Martin Glenn still needed to attend to the problem of fund possession on December 12, 2022.
However, in a positive light, Celsius announced on its Twitter page that any customer who had suffered from the company’s tragic demise by keeping their assets in other services offered by Celsius had until January 3, 2023, to file a claim.
How Did Celsius Become Bankrupt?
Due to the crash of the popular Terra stablecoin (UST) and its affiliate coin, LUNA, Celsius witnessed a massive funds withdrawal from its clients, spurring the crypto firm to halt all transactions on its platform, citing the fall of Terra as its reason. Celsius had been caught in the crossfire along with its 1.7 million users whose accounts it had frozen.
The crypto lender firm eventually laid off 23% of its workforce after stopping all transactions on its platform, and by July 13, the company had filed for Chapter 11 bankruptcy protection.
Celsius’ Stance on Key Employee Retention Program (KERP)
On December 5, the bankrupt crypto lender, Celsius, received permission from the judge for a $2.8 million KERP per the company’s filing in October. This permission will benefit the remaining 170 employees who had retained their positions with the firm out of the initial 370 workers that had been with the company before it filed for bankruptcy.
Conclusion
Judge Martin Glenn ordered the bankrupt crypto lender, Celsius, in an oral hearing to release $44 million worth of crypto back to its customers who had kept their funds in a specific account before the company filed for bankruptcy.
