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Judge Approves 72.5% Settlement for Defunct Celsius Custody Account Holders

Judge Approves 72.5% Settlement for Defunct Celsius Custody Account Holders

A federal bankruptcy judge has approved a settlement for the defunct crypto lender Celsius. Under the settlement terms, creditors will opt to receive up to 72.5% of their funds.

Celsius was one of the biggest players in the crypto lending market in 2022 before it went under during the contagion that began in May. Since then, creditors have been suing Celcius to return their investments.

A federal judge has finally provided them with a possible solution. Judge Martin Glenn approved a settlement plan where the Celsius custody account holders will receive up to 72.5% of their funds. However, those who opt in will lose their right to pursue further litigation against the lender.

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The settlement terms are only viable if the debtors, custody account holders, and unsecured creditors approve the plan. According to the agreement, those that opt-in will first receive 36.25% and a further 36.25% at the end of the resolution.

Under the plan, custody accounts under $100K can claim up to 100% of their fund, while those over $100K cannot claim more than 72.5%.

Since its Chapter 11 filing, Celcius has attempted various strategies to compensate its creditors. At one point, the defunct crypto lender released a new token to repay crypto investors.

According to LAW360, creditor lawyer Bryan Kotliar said making a deal was a challenging and long-lasting task. He noted that behind the scenes, the process was a total rollercoaster.

In an earlier ruling, Judge Glenn ruled that over $4 billion held in the Celsius Earn program belonged to the firm, not the lenders. Later, the judge ruled that around $44 million worth of crypto should be returned to Celcius customers. In February, the judge approved the sale of $7.4 million Bitmain coupons.

Gile K. , Market Sentiment Analyst
Gile is a Market Sentiment Analyst who understands what public events may form what emotions. Her experience researching Web3 news and public market messages – including cryptocurrency news reports, PRs, and social network streams – is critical to her role in helping lead the Crypto News Editorial Team.
As an intelligent professional in public relations, together with the team, she aims to determine real VS fake news patterns, and bring her findings to anyone searching for unbiased news and events happening in the FinTech markets. Her expertise is uncovering the latest trustworthy & informative Web3 announcements to the masses.
When she's not researching the trustworthiness of mainstream stories, she spends time enjoying her terrace view and taking meticulous care of her outdoor environment.

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