Customers Can Now Withdraw Funds from Bankrupt Celsius

Celsius-Network-May-Require-Funds-Return-by-Court-Order
  1. Celsius has won court approval for customer withdrawals.
  2. The lending firm filed for bankruptcy on July 14, 2022.
  3. Judge Martin Glenn also gave the go-ahead for an airdrop of Flare tokens to debtors.

Celsius has been granted permission by Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York to return funds that were transferred to the platform after the company filed for bankruptcy on July 14, 2022.

According to the order, customers are permitted to withdraw funds transferred to the platform after the date of the bankruptcy petition in the form of cryptocurrency, “net of any gas fees or transaction costs.” This is the case even though the funds were withdrawn after the date of the bankruptcy petition. 

Allegedly, if the transfer amount is more than $40,000 (and the transferor received more than $200,000 from Celsius in the three months prior to the bankruptcy filing), then the withdrawals will need to be authorized by the committee of creditors that has been established.

Another ruling, also signed by Judge Glenn, gave the go-ahead for an airdrop of Flare tokens to debtors who met the requirements. After a wait of two years, holders of XRP were finally able to receive tokens from the Flare platform earlier this month. Flare was first conceived as a decentralized finance (DeFi) service that made use of XRP tokens.

It is important to remember that seven months ago, the Financial Times reported, citing unnamed sources, that Alex Mashinsky, the troubled founder and former CEO of Celsius Network, withdrew $10 million from the now-defunct cryptocurrency lender weeks before Celsius stopped allowing client withdrawals in June. 

Reportedly, Mashinsky withdrew the bitcoin in May of this year, which coincides with his departure as CEO, which took place on September 27 at midnight Eastern time. 

The Terra ecosystem was experiencing a collapse at the time, which caused a loss of value equal to $60 billion during that month and shook the crypto markets.

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Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

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