Celsius Network’s Advisors Seek $2 Billion Return from Top Clients Ahead of Bankruptcy Settlement

[adinserter block=”2″]

Celsius Network's legal advisors requesting $2 billion from clients before bankruptcy proceedings


Advisors Demand $2 Billion Withdrawn Pre-Bankruptcy

Consultants overseeing the liquidation of Celsius Network LLC have set their sights on recovering $2 billion from the platform’s significant clients. These funds were withdrawn in the critical period leading up to the company’s bankruptcy filing, a move that has sparked potential legal action.

According to a Bloomberg report, the committee formed during the bankruptcy proceedings is now reaching out to these key clients. Their goal is to reclaim assets that could greatly assist in repaying the crypto platform’s creditors.

Efforts to Avoid Lengthy Litigation

In an attempt to streamline the recovery process and avoid potential litigation, advisors have started contacting clients who had withdrawn substantial amounts—over $100,000—from Celsius before its financial turmoil became public. This targeted recovery effort is aimed at those who might hold a significant portion of the platform’s assets, giving them an opportunity to settle potential liabilities based on the value of their assets at the time of withdrawal in 2022.

A Focus on a Small Fraction of Users

The recovery initiative is expected to impact around 2% of Celsius users, a small but financially significant group. This group collectively withdrew approximately 40% of the platform’s assets within 90 days before the Chapter 11 filing. At the time of its bankruptcy announcement, Celsius reported holding $6 billion in crypto assets, with a user base comprising 1.7 million registered individuals and 300,000 active users with account balances exceeding $100.

The Road Ahead for Celsius Network

Despite the grim financial situation outlined in mid-August 2022, where Celsius Network’s debts outstripped its assets by $2.85 billion, there’s a glimmer of hope. The creditors have formulated a reorganization plan that has garnered approval from most account holders. This plan outlines the distribution of over $3 billion in cryptocurrency and fiat funds to the creditors, aiming to mitigate the financial damage and pave the way for a more stable future for the platform and its users.


Source link

[adinserter block=”2″]