According to a recent Bloomberg report, a bankruptcy judge in the US involved in the Celsius bankruptcy case ordered the firm to restore crypto tokens valued at $50 million to users of custodial accounts.
After declaring bankruptcy in July. Additionally, in preparation of a separate hearing to address ongoing concerns about “its efforts to restructure and relaunch its operations,” Celsius filed a motion in September. It is to restore cryptocurrency to clients who had assets in such accounts.
About 58,300 users of Celsius have deposited over $210 million in custody and withheld. And 15,680 individuals have Pure Custody Assets valued at about $44 million.
Additionally, just before the company filed for bankruptcy, some coins were moved from interest-bearing accounts to custodial accounts. The judge ordered Celsius to restore those coins. This order covers the coin transfers that totaled less than $7,500.
Celsius To Continue Paying Debts
Celsius has asked for the judge’s approval to sell the $18 million worth of cryptocurrency to continue paying its debts. While some creditors claimed the rules were unclear and had evolved. Celsius’ advisers noted that the firm’s Terms and Conditions clearly state that by using an account, one agrees to give up ownership of any coins or tokens.
The order relates to a quantity of cryptocurrency valued at about $44 million in September. Other users owe billions of dollars in currency. However, the judge will decide the admissibility of crypto deposited in interest-bearing accounts before the company files for Chapter 11.
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Moreover, the ownership of cryptocurrency assets belongs to customers with custodial accounts. Since the firm’s estate is not the owner of these funds, they belong to the clients. Celsius advisors and stakeholders discovered that Coins held in custody belonged to users, which led to the steps.
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