A US Bankruptcy Judge, Martin Glenn, has approved a settlement plan for Celsius Network, a defunct crypto lending platform, allowing custody account holders to recover 72.5% of their crypto holdings. The decision was made during a hearing on March 21st in the US Bankruptcy Court for the Southern District of New York.
The settlement agreement allows claimants to receive 72.5% of their crypto claims, provided they approve of the settlement. The agreement also prevents claimants from pursuing any litigation or seeking relief from the automatic stay, turnover, or other claims or causes of action. Digital assets not part of the settlement will be controlled by 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
Background
Celsius Network filed for Chapter 11 bankruptcy in July, and since then, there have been various rulings and developments in the lending platform’s case. In January, Judge Glenn ruled that more than $4 billion in funds from Celsius’ interest-bearing Earn program belonged to the lending platform. However, in December, a ruling ordered roughly $44 million in crypto to be returned to Celsius customers. In February, the judge authorized Celsius debtors to sell $7.4 million worth of Bitmain coupons if needed.
Ongoing Bankruptcy Proceedings
Bankruptcy proceedings for major crypto firms are ongoing across courts in the United States, with firms such as Signature, Silicon Valley, and Silvergate Bank being affected by the 2022 market crash. On March 17th, the debtors in the FTX crypto exchange bankruptcy case reported a roughly $7 billion shortfall between scheduled assets and claims.
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