Celsius Commences Withdrawals Eight Months After Filing For Bankruptcy

Crypto lender firm Celsius has announced that customers can now withdraw their assets from its platform eight months after the company filed for bankruptcy. According to an official tweet on March 2, withdrawals are now available, albeit for certain custody accounts only.

This development follows a court order in January, which authorized Celsius to process withdrawals. However, only assets in a Celsius custody account can be withdrawn based on this directive. 

These include “Pure Custody” assets that were never in an Earn or Borrow account and “Transferred Custody” assets that were moved from an Earn or Borrow account to a custody account 90 days before Celsius filed for bankruptcy. 

However, custody accounts that had received assets worth over $7,575 from the Earn or Borrow Program are ineligible for withdrawals. According to the court order, only 94% of distributable assets can be withdrawn from all eligible accounts for now. 

Is Celsius Making A Comeback?

In mid-July 2022, Celsius filed for Chapter 11 bankruptcy leading the crypto lending venture to owe customers a total of $4.7 billion. Celsius’s fall was driven mainly by the value of several crypto assets plummeting rapidly due to a widespread liquidity crisis. 

However, following its collapse, the crypto firm has been working internally to restructure its operations and pay off its creditors. On February 15, 2023, Celsius announced its acquisition by digital asset investment company NovaWulf Digital Management. 

This agreement with NovaWulf aims to sponsor Celsius’s reorganization plan, allowing the company to close the Chapter 11 bankruptcy process and begin full funds distribution as early as June.

In relation to that, Celsius intends to pay off all its earn creditors with liquid cryptocurrency. However, earn creditors with claims less than $5,000 will be considered a “convenience class” and are eligible for only 70% of their claim, paid out in BTC, ETH, and USDC. 

The news of its acquisition by NovaWulf, coupled with the recent commencement of withdrawals from custody accounts, all point to signs that Celsius might just be making a comeback into the crypto scene. However, it is still too early to tell. 

Meanwhile, The Crypto Market Awaits A Major Event

In other news, the cryptoverse is still anticipating the massive asset reimbursement by the defunct crypto exchange Mt. Gox later this month. In 2014, the Tokyo-based exchange ceased operations and filed for bankruptcy following revelations about a hack that resulted in the loss of about 750,000 BTC belonging to customers. 

In 2021, an agreement was struck between Mt.Gox trustee Nobuaki Kobayashi and CoinLab Inc. to reimburse alI Mt. Gox’s creditors using the remaining Bitcoin from the bankruptcy proceedings. However, the date for the commencement of this exercise has been moved continuously to its present date of March 10, 2023.

The main concern surrounding Mt. Gox’s repayment of funds stems from the potential negative effects of “dumping” a large number of assets into the crypto market at once. Based on popular reports, Mt. Gox creditors are expected to receive a total of 141,000 Bitcoin (BTC), 141,000 Bitcoin Cash (BCH), and $1.7 billion in fiat cash.

That said, the crypto market is currently experiencing a general price correction, with most assets recording little losses. Bitcoin, the world’s  No.1 cryptocurrency, is presently valued at $22,388.00, having decreased by 4.61% in the last 24 hours.

BTC trading at $22,388.00 | Source: BTCUSD chart on Tradingview.com

Featured Image: PR Newswire, chart from Tradingview.