The order applies only to the funds held in custody accounts.
Celsius, a bankrupt crypto lender established in 2017, received a federal judge’s order to return $44 million worth of crypto to its custody program customers.
According to December 7th Bloomberg report, the order was verbally shared by United States Bankruptcy Judge Martin Glenn.
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While presenting the order, Judge Martin Glenn stated:
I want this case to move forward. I want creditors to recover as much as they possibly can as soon as they possibly can.
The funds that should be returned to Celsius customers include only those held within custody accounts. It is worth noting that it is only a tiny fraction of all funds Celsius owes to its investors.
The decision to return around $44 million to customers was made after stakeholders and Celsius advisers agreed that funds deposited in the custody accounts belong to investors and not Celsius.
The order is applied to crypto assets held in the custody program. The judge highlighted that assets that at some point were located in Celsius Earn accounts are not subject to the federal judge’s order.
It is reported that Celsius Earn accounts currently hold around $4.7 billion worth of funds. Whereas, according to the data shared on August 29th, Celsius had approximately $210 million in custody accounts. However, only $44 million falls into the order criteria.
In its bankruptcy proceedings, Celsius claims that users gave up all of their rights to funds held in their earn accounts when agreeing with Celsius’ terms and conditions.
It is worth noting that just the other day, Celsius received a new deadline to submit its Chapter 11 restructuring plan. The platform has until February 15th, 2023, to introduce “a value-maximizing path forward.”