Cryptocurrency lender, Celsius has received approval from the court to allocate 94% of each user’s eligible assets. A 1,400-page document filed with New York’s bankruptcy court filed regarding the same. In this document, the firm has highlighted the names of the qualified customers. Kirkland & Ellis LLP filed this document on behalf of the bankrupt firm.
Additionally, the court will rule in due course on what will happen to the remaining 6%. Celsius took to Twitter to highlight the same.
In addition to this, users’ updates to particular customer information linked to Anti-Money Laundering [AML] and Know Your Customer [KYC] information are required before withdrawals may be processed, even if there are sufficient assets on the platform to satisfy any associated costs.
Furthermore, the eligible customers of Celsius would be notified via email. The firm would send out an email around Feb.15 detailing the process involved with the withdrawals.
The firm added,
“Unless and until an eligible user updates his or her account with the required account updates, such eligible user will be unable to withdraw his or her distributable custody assets from the debtors’ platform.”
Here’s when Celsius’ woes actually started
According to Shoba Pillay, the examiner in this bankruptcy case, Celsius’ troubles date back to 2020. Elaborating on the same she said in a filing,
“Celsius’ problems did not start in 2022. Rather, serious problems dated back to at least 2020, after Celsius started using customer assets to fund operational expenses and rewards.”
It should be noted that the cryptocurrency lender decided to halt withdrawals only in 2022. The firm eventually filed for bankruptcy in July 2022.