The bankruptcy judge overseeing the bankruptcy case for crypto lending platform Celsius Network has approved a settlement plan that allows custodial account holders to get back 72.5% of their crypto holdings.
At a March 21 hearing, United States Bankruptcy Judge Martin Glenn signed off on an agreement that would allow Celsius custody account holders to receive 72.5% of their crypto claims if they approve the settlement. Under the agreement, plaintiffs cannot “pursue any litigation, including seeking relief from automatic stays, turnover, or other claims or causes of action” and digital assets that are not part of the settlement will be controlled by Celsius’ creditors.
Bankruptcy Court: The # Celsius Custody settlement approved. It will be optional for customers. 30 days to review. The elector will receive 72.5% of the claim in two distributions 36.25% up front and 36.25% after the resolution of the plan (or at the end of the year).
– Cam Crews (@camcrews) March 21, 2023
The settlement between a committee of unsecured creditors, Celsius Debt, and an ad hoc group of account holders is the latest development in the case of the lending platform in the US Bankruptcy Court for the Southern District of New York since it filed for Chapter 11 in July. The inactive platform announced in February that NovaWulf Digital Management will be the sponsor of the restructuring plan, which suggests that more than 85% of Celsius customers will recover approximately 70% of their crypto.
Judge Glenn ruled in January that more than $4 billion in funds from the Earn program that have interests in Celsius include the lending platform. However, a December ruling ordered approximately $44 million in crypto to be returned to Celsius customers, and a February ruling by a judge authorized Celsius debt to sell $7.4 million in Bitmain coupons if necessary.
related: Celsius’ attorney and advisory fees on track to reach $144M, community responds
Bankruptcy proceedings for major crypto companies in the midst of the 2022 market crash are underway in the courts of the United States, now in the background of the failures of Signature, Silicon Valley and Silvergate. On March 17, debtors in the bankruptcy case crypto exchange FTX reported a shortfall of approximately $7 billion between scheduled assets and claims.