According to Odaily, the bankruptcy administrator of the insolvent cryptocurrency lending institution, Celsius Network, has filed a lawsuit against account holders who have not settled their debts related to preferential transfers within 90 days before the company filed for bankruptcy. The lawsuit was filed in the United States Bankruptcy Court for the Southern District of New York, targeting individuals with a Withdrawal Priority Exposure (WPE) exceeding $100,000.
Previously, Celsius had successfully reached settlements with over 1,500 account holders, recovering nearly $100 million. The settlement agreements resolved over $500 million in priority debt issues, providing significant relief for eligible Celsius creditors. Celsius' lawsuit administrator, Mohsin Meghji, stated, 'Account holders who withdrew funds before Celsius' bankruptcy obtained unfair benefits, affecting other account holders. These individuals had ample opportunities to settle at preferential rates. Now, we will recover the full value of the cryptocurrency transferred during the priority period in accordance with the provisions of the Bankruptcy Act.'
Massive withdrawals during the priority period (from April 14, 2022, to July 13, 2022) led to severe financial imbalance in the company, which eventually filed for bankruptcy after the priority period.