Surprisingly, users of bankrupt cryptocurrency lender Celsius Network are now facing legal action from bankruptcy management after making large withdrawals within 90 days of the company’s bankruptcy filing.
The bankruptcy administrators have requested that impacted clients repay some of their funds or face additional legal risks.
— KERO🛸 ❤️ $WELL (@KKSKK) January 11, 2024
Customers are subject to the settlement demands of Celsius Network.
Customers who withdrew more than $100,000 during the designated 90-day period before July 12, 2022, are at the core of the legal issue, according to the filing, which was published on Tuesday.
These consumers were informed via an official filing explaining the processes for resolving their withdrawal preference exposure.
The notice’s withdrawal preference exposure refers to the total value of assets withdrawn by customers from the Celsius Network platform during the indicated period, minus any further deposits made after the first withdrawal.
”Not only must banks prevent sanctioned customers from using their services, but they must also prevent customers engaged in activities that are subject to #sanctions from using their services. As the new [#US] Executive Order makes clear,”https://t.co/dlUch8P1NZ
— 🦠crypto_Javik🛢 (@crypto_Prothean) January 10, 2024
Customers with withdrawal preference exposures greater than $100,000 must resolve their claims or seek a court order to avoid potential liabilities, according to bankruptcy management.
Celsius Network LLC and Its Debtor Affiliates’ Modified Joint Chapter 11 Plan of Reorganization includes an Account Holder Avoidance Action Settlement.
Under this settlement, the debtors will release avoidance actions against account holders who meet specific criteria, including accepting the plan on all claims and contributing a payment equal to 27.5% of their withdrawal preference exposure.
The plan’s implementation date is expected to be around January 31, 2024.
Customers who choose to make the settlement payment must additionally complete and return the election form by January 25, 2024. On January 17, 2024, the Debtors will begin accepting completed election forms. Failure to submit the form may result in the settlement payout being rejected.
Oh! I see now. Keep the attitude and the plan's off. Mal. https://t.co/SbrodrQcFM
— 𝔸𝕝𝕖𝕛𝕒𝕟𝕕𝕣𝕠 🗡 (@BestBurromuert0) January 11, 2024
The crypto world awaits more developments in this ongoing bankruptcy case while customers deal with unexpected legal action.
The conclusion of the Account Holder Avoidance Action Settlement will shed light on settling withdrawal preference exposure claims and subsequent money distribution.
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