The bankrupt cryptocurrency lending platform Celsius Network intends to submit a motion that, if successful, will give users an additional month to submit their claims before the deadline. After noting that Celsius’ lawyer fees have continued to pile up and are chipping away at the lender’s estate, the cryptocurrency community has begun to show signs of growing impatience.
In a tweet sent out on December 29, Celsius made the announcement that it would request to extend the current deadline for claims, which is set for January 3, to sometime in early February. According to Celsius, the deadline set on January 3 will be extended at least until the bankruptcy court hears the motion on January 10.
Celsius is preparing to file a motion later this week requesting an extension of the bar date, which is the deadline to file a claim, from January 3, 2023, until early February.
— Celsius (@CelsiusNetwork) December 29, 2022
The Continous Dilemma of User Claims
During bankruptcy procedures, creditors who consider that they are entitled to payment are able to make claims through a process called the claims process. As of the 29th of December, more than 17,200 claims had been submitted by Celsius’ creditors. However, Celsius’ creditors are anxious as a result of the continuous accumulation of Celsius’ administrative fees since the company initially filed for bankruptcy in the month of July.
According to a report published by the Financial Times on December 27, the total amount of money paid out in fees to bankers, attorneys, and other advisors involved in the bankruptcy process had already surpassed $53 million. One of the law firms that represent Celsius, Kirkland & Ellis, submitted a fee statement on December 15 requesting a charge of more than $9 million for work completed during the months of September and October.
In comparison, Celsius has only budgeted a total of $44 million to date for the purpose of returning money to its clients. This money belongs to users who have only ever kept funds under the Custody Program, and it is a relatively tiny fraction of the $4.72 billion in user deposits held by Celsius.
The Reaction of the Crypto Community
Some members of the cryptocurrency community are under the impression that the most recent delay in the proceedings is just another attempt to put things off for as long as possible. As an example, one person commented, “Stop wasting time, stop extending, just go on with proceedings and give me my money back!!!!” while another person simply said: “Stop wasting time and my money.”
This motion is scheduled to be heard by the Court at our hearing on January 10, 2023. For now, the deadline is extended until the motion is heard by the Court. We will provide further updates on the bar date as they become available.
— Celsius (@CelsiusNetwork) December 29, 2022
Simon Dixon, the founder of the global investment platform BnkToTheFuture, who has been an important voice in the Celsius bankruptcy proceedings, mentioned in a tweet on December 23 that users should only expect to receive around half of what they initially invested in Celsius by the time they are able to get their funds back from the company.
Prepare yourself for 50% in 6 months with #Celsius Chapter 11 to manage your expectations | Focus on your family over XMas & rebuilding in 2023. https://t.co/E0WeDuPem0
— Simon Dixon (@SimonDixonTwitt) December 23, 2022
On October 20, Judge Martin Glenn assigned fellow judge Christopher Sontchi to the role of “fee examiner.” This appointment came at the request of Celsius, the U.S. trustee, and the committee representing unsecured creditors. It is his responsibility to negotiate and authorize the fees that have been established by the lawyers and other professionals involved in the case.
Additionally, the fee examiner is receiving payment from the estate of Celsius; the most recent fee statement was issued on December 21 and requested slightly under $20,000 for work completed during the month of November.
