Celsius Bankruptcy: Judge Orders Return of $50m
The ongoing Celsius bankruptcy case saw a new development this week as US judge Martin Glenn delivered a ruling. He issued a direction that the firm must pay back $50 million worth of crypto assets to users' custody accounts.
The ruling during the hearing on Wednesday came after Celsius stakeholders and advisers concluded that custody assets belong to customers, not the company.
Verdict applies to $44 million custody assets
As per the filing that was made in September, the company owes roughly $44 million. However, that is said to represent only a small portion of the total debts of the firm.
The filing also shows that the company has around 58,300 users with about $210 million in withholding and custody accounts. The recent ruling by Judge Glenn applies only to the custody assets of 15,680 users.
Pending decision on interest-bearing accounts
Earlier, the bankrupt crypto lender also asked for the judge's consent to sell $18 million worth of virtual assets from interest-bearing accounts. The users deposited the amount in these accounts before the lender filed for Chapter 11 bankruptcy. However, Judge Glenn is yet to give a verdict on this request.
The US judge says he wants the Celsius bankruptcy case to move forward as quickly as possible. According to a Bloomberg report, he also announced that he wants creditors to get back "as much as they possibly can" and "as soon as they possibly can".
This pending decision is crucial for the case because Celsius might claim these assets. There were more than $200 million in custody accounts in September. However, a large part of the holdings was transferred from the interest-bearing funds just before the company filed for bankruptcy. That’s why the rules of preferential transfers may benefit the company. This decision could also set a legal precedent in bankruptcy cases.
Author: Wasay Ali
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