A bankruptcy judge in charge of the bankruptcy case of crypto lending platform Celsius Network has approved a settlement plan allowing custody account holders to recover 72.5% of their cryptocurrency holdings.
At a hearing on March 21, United States Bankruptcy Judge Martin Glenn approved an agreement granting Celsius custody account holders the right to receive 72.5% of their crypto claims, assuming they agree to the settlement. Under the terms of the deal, claimants cannot pursue any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action, and digital assets not included in the settlement will remain in the custody of the Celsius debtors.
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).
— Cam Crews (@camcrews) March 21, 2023
The settlement between the committee of unsecured creditors, Celsius debtors, and an ad hoc group of account holders was the most recent development in the case of the lending platform in the U.S. Bankruptcy Court for the Southern District of New York since it filed for Chapter 11 in July. In February, the now-defunct platform announced that NovaWulf Digital Management would sponsor its restructuring plan. The plan said that over 85% of Celsius customers would get back about 70% of their cryptocurrency.
In January, Judge Glenn ruled that over $4 billion in funds from the Earn programme of Celsius belonged to the lending platform. However, a December ruling ordered approximately $44 million in crypto to be returned to Celsius customers, and a February ruling authorised Celsius debtors to sell $7.4 million worth of Bitmain coupons if needed.
The backdrop for the failings of Signature, Silicon Valley, and Silvergate is the ongoing bankruptcy proceedings for key crypto firms in the United States in the wake of the market collapse of 2022. On March 17, the crypto exchange FTX’s bankruptcy case defendants disclosed a shortfall between scheduled assets and claims of approximately $7 billion.
