Celsius Network will have to return $44 million in funds from its customers, as decided at a hearing on Dec. 7. According to the current quotation, the value corresponds to approximately R$ 210 million. According to bankruptcy judge Martin Glenn, the loan company has to return the funds. However, these funds are not part of the company’s income accounts. That is, the decision does not mean the beginning of unlocking the money lost by customers. This total of R$210 million represents a small fraction of the amount owed by the company. Estimates of the amount trapped in income accounts run into the billions of dollars. “I want this case to move forward, I want the creditors to recover as much as possible as quickly as possible,” said Judge Green. Celsius Network filed for Chapter 11 bankruptcy in July after a month of severe liquidity issues in the aftermath of the Terra/Luna collapse. Celsius customers struggle to this day to be able to withdraw their money, blocked by the company before the order.
Celsius moves funds
This decision took into account the fact that Celsius has two types of accounts: normal cryptocurrency custody accounts and interest-earning accounts. In their ruling, Green and Celsius’s advisers acknowledged that money in escrow accounts belongs to users, not the company. Soon, Celsius must release access and return these resources to customers. But the court has yet to determine where the money in the interest accounts, most of the amount, will go. According to the ruling, Celsius had at least US$200 million in escrow accounts, or around R$1 billion. But much of that money was transferred to income accounts shortly before filing for bankruptcy. As part of the process, Celsius can claim ownership of some of them due to preferential transfer rules. In that sense, the company could be left with up to $11 million in that category, according to court documents. On Dec. 6, Celsius won the right to extend its Chapter 11 recovery plan until Feb. 15 of next year. The company celebrated the deadline extension and said it will use the time to create a sustainable business plan. “We intend to use this time to continue to develop a plan for an independent business as we explore all of the value that maximizes available opportunities, for the benefit of our customers and other stakeholders,” the company said. In its bankruptcy filing, Celsius revealed it has between $1 billion and $10 billion in liabilities and more than 100,000 creditors.
Market continues to fall
The cryptocurrency market has become accustomed to the recent crises, but prices are still operating in devaluation in early December. In total, the cryptocurrency market cap dropped 1.7% in the last 24 hours and reached $876 billion, according to CoinGecko. But cryptocurrencies are experiencing a mild recovery, with Bitcoin (BTC) and Ether (ETH) posting gains of 0.2% and 1.3% respectively. The Celsius Network (CEL) token rose 9%, but lost strength and now registers an appreciation of 2.1%, worth R$ 3.64.
