Celsius, a cryptocurrency lending platform that declared bankruptcy, has initiated fund withdrawals for specific users amidst financial instability and legal disputes. As per filings in the U.S. Bankruptcy Court for the Southern District of New York, participants involved in the "Class 6A General Escrow Claims" and "Class 6B Revocable Escrow Claims" are now eligible for early fund withdrawals by a deadline of February 28th, 2024. Eligible users can withdraw up to 72.5% of their cryptocurrency holdings, excluding transaction fees, with those who objected to the restructuring plan being excluded. Instead, an administrator will handle their assets separately within a six-month timeframe.
Since filing for bankruptcy in July 2022, Celsius has navigated various legal challenges. A settlement plan approved in March obligated deposit account holders to pay 72.5% of their funds in two installments during 2023. Subsequently, creditors sanctioned the company's reorganization plan in September, facilitating the distribution of around $2 billion in Bitcoin and Ethereum. Celsius' equity will be shifted to NewCo under the supervision of Fahrenheit Group. In a recent announcement on November 20, Celsius revealed that NewCo's central business, as outlined in the restructuring plan, would focus on Bitcoin mining rather than staking.
Amidst bankruptcy proceedings and legal confrontations, Celsius faced lawsuits from multiple regulatory bodies including the U.S. Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Commodity Futures Trading Commission. The allegations primarily accused the company and CEO Alex Mashinsky of defrauding customers. Despite Celsius' $4.7 billion settlement with the FTC, Mashinsky is slated to undergo a criminal trial.
