#Celsius Network, facing financial difficulties, has submitted a proposal to recover funds from users who withdrew significant amounts - over $100,000 - in the three months prior to the company's bankruptcy declaration.
Call for Creditors to Return Funds
Creditors of Celsius, who withdrew large sums from the platform before its bankruptcy, might be compelled to return a portion of these funds. This requirement applies to those who made withdrawals exceeding $100,000 within the 90-day period before the official bankruptcy declaration on July 13, 2022.
Conditions for Repayment and Settlement Option
The bankruptcy administrators of Celsius indicate that account holders who withdrew more than $100,000 and meet certain criteria can settle their debt by paying 27.5% of the withdrawn amounts by January 31, 2024. These users should submit a confirmation form of their intent to pay by no later than January 25.
Screenshot from notice to Celsius account holders Case No. 22-10964. Source: Stretto
Consequences for Those Who Do Not Settle Their Obligations
Users who choose to settle will receive protection from legal disputes and will be entitled to a share according to the company's reorganization plan. Conversely, those who do not settle may face legal actions from the bankruptcy administrators to recover the withdrawn funds.
Further Steps and Plans of Administrators After Bankruptcy
If a settlement agreement is not reached by January 31, 2024, the administrators plan to resolve this situation through legal disputes. Already in November 2023, the administrators allowed some participants to withdraw a portion of their held cryptocurrencies.
In November 2023, the firm also announced a new post-bankruptcy strategy focused on #Bitcoin mining. This strategy was approved by the judge presiding over the bankruptcy proceedings in December, indicating a new direction and a potential path to recovery following bankruptcy.
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