While 2022 started on a good note for the crypto-verse, Q2 was quite chaotic for the industry. The dominance of the bears, followed by a slew of bankruptcy filings, sent shockwaves to crypto enthusiasts across the globe. Prominent crypto lender Celsius was at the forefront of this. The platform created quite the buzz after its Chapter 11 bankruptcy filing. Amidst this, several platform customers protested in demand of the funds stuck in the firm. The crypto lender was finally ready to address their woes but not entirely.
Even after the bankruptcy filing, several customers employing the custody program weren’t worried as the funds in it weren’t the company’s property. However, since Celsius wasn’t releasing those funds, many customers formed groups and demanded the same. Just yesterday, an ad hoc group of 64 people sought repayment through a request to the New York Bankruptcy Court. Now, in a recent filing, Celsius addressed the same and said,
“The Debtors believe that assets in the Earn Program and the Borrow Program are likely property of their estates, and that the transfer of such assets to Custody Program or the Withhold Accounts would have been a transfer of the Debtors’ property to customers on account of such customers’ claims against the Debtor.”
Celsius to address Custody users’ woes?
The latest motion filed by the crypto lender will reportedly be limited to Custody and Withold Accounts and for custody assets worth $7,575 or less. Notably, 58,300 users hold about $210 million worth of custody assets. In addition, about 5,000 users withheld assets worth $15.33 million.
It was further noted that only $50 million out of the $210 million would be released. Celsius’s lawyers further categorized assets into “Pure Custody/Withhold Assets” and “Transferred Custody/Withhold Assets.” Here, Pure assets were those that weren’t transferred from any Earn programs.
Further revealing details about the next hearing, the firm tweeted,
The community was rather displeased with this move and urged Celsius to return their funds.