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Celsius Network Files To Return A Portion Of Funds Back To Its Users

Celsius Wants to Extend the Time for Consumers to Make Claims

In a report submitted to the New York Chapter Court, Celsius Network reported that it was temporarily restarting withdrawals to refund 22 percent of the funds to its customers, or approximately $48 million.

Another lawsuit has been filed in US bankruptcy court by Celsius Community. The struggling crypto lending platform asks authorization to release $48 million in frozen money. The government created custodial accounts to be storage wallets rather than return-earning wallets. The hearing will take place on October 6, according to court documents.

Following a month of halting all platform transactions because of “high market conditions,” Celsius filed for bankruptcy in July.

What Does the Court Say?

According to the court filing, customers who used Celsius’s earn-and-borrow services freely gave up ownership of their funds to the company, while customers who just deposited funds for storage kept ownership.

 

A bankruptcy filing by Celsius Community indicates that the company still has $48 million in debt, with over $200 million in “custodial accounts.” Bloomberg reports that buyers moved their investment from an interest-bearing account to a custodial account before the process began.

 

Documents filed with the court also estimate that as of July 10, the earned accounts on the platform had nearly $4.2 billion in user funds. A crypto lending platform called Celsius Community was launched in 2017. In addition to bitcoin lending and borrowing, the site would offer high-interest rates.

The company’s high market conditions caused it to stop firm withdrawals. Kirkland & Ellis LLP has been hired to handle judicial proceedings for Celsius Community’s reorganization.

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