Celsius Network, which filed for bankruptcy in June, has agreed to pay 5% more to its customers as part of a settlement.
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Celsius Network has reached a settlement with its customers that could make it easier for the company to exit bankruptcy. The settlement includes an offer to pay 5% more to customers who agree to participate in a litigation settlement concerning charges of management misconduct.
Celsius Raises Customer PayoutsCelsius and its unsecured creditors’ committee have reached a resolution on the committee’s class action fraud claim through a joint motion. As part of the agreement, assets account holders will receive a bonus in the company’s Chapter 11 plan, leading to significant cost savings and expediting the return of cryptocurrency to customers.
In a motion submitted to the US Bankruptcy Court for the Southern District of New York, the cryptocurrency lender, Celsius, stated that the proposed agreement with the committee of unsecured creditors would prevent the expenses and delays of prolonged litigation.
Celsius is facing more than $70 billion in fraud and other legal claims, unrelated to its customer contracts.
Account holders can choose to participate in the settlement or not. Custody account holders are not included in the settlement because they already have an agreement with Celsius.
Lawsuit Cost Reduction Deal
As per committee attorney Aaron Colodny’s email on Friday, the agreement is expected to reduce legal expenses and decrease the amount of cryptocurrency that Celsius will have to reserve for disputed claims.
The bankrupt cryptocurrency exchange had previously reached a $4.7 billion settlement with the Federal Trade Commission. Recently, the former CEO of Celsius, Alex Mashinsky, was arrested on federal securities fraud charges.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
