The litigation administrator of bankrupt cryptocurrency lending company Celsius Network has filed legal action against account holders who received priority transfers within 90 days before the company filed for bankruptcy. The lawsuits were filed in the United States Bankruptcy Court for the Southern District of New York against accounts with more than $100,000 in withdrawal rights exposure (WPE), ChainCatcher reported.
The announcement follows successful settlements with more than 1,500 account holders, recovering nearly $100 million. These settlements resolved more than $500 million in priority debt and provided significant relief to eligible Celsius creditors.
During the priority period from April 14, 2022 to July 13, 2022, a large number of withdrawals caused the company to have a serious financial imbalance, and ultimately filed for bankruptcy after the priority period ended. Former Celsius CEO Alex Mashinsky and other executives are facing charges of fraud and market manipulation that led to the company's collapse.