Investing
Celsius Will Let Some Users Withdraw Up to 94% of Their Assets
February 1, 2023 10:17 pm
Some Celsius Network users will be able to withdraw 94% of their eligible assets, according to a 1,400-page court filing, while the fate of the remaining portion will be decided by the court in the future. The troubled crypto lender won the ownership of over $4.2 billion of user funds last month.
Court to Decide What Will Happen with Remaining 6% of User Assets
A new court filing showed that some Celsius Network users would be allowed to withdraw 94% of their assets. On the other hand, it is still uncertain whether users will be able to withdraw the remaining 6%, and will be decided by the court at some point in the future, according to Kirkland & Ellis, a law firm representing Celsius.
The 1,400-page filing listed the names of users eligible to withdraw, though Celsius noted that they need sufficient assets in their accounts to meet withdrawal costs. Apart from their names, the document also lists the type and amount of debted assets.
Celsius also said eligible users would be required to provide additional information before processing their withdrawals. This information involves user data related to Know Your Customer (KYC) and Anti-money Laundering (AML) policies, among other things.
“Unless and until an eligible user updates his or her account with the required account updates, the such eligible user will be unable to withdraw his or her distributable custody assets from the debtors’ platform.”
– Celsius Network said.
Celsius Misused Customer Funds for Years, says Court-appointed Examiner
The new filing comes just a day after reports showed that Celsius misused the funds of its investors and users for years, as well as allowed its founders to cash out tens of millions of dollars, according to a court-appointed examiner Shoba Pillay. The examiner slammed Celsius CEO Alex Mashinsky for failing to employ appropriate risk management methods and misleading customers about the crypto lender’s financial health.
Pillay’s report also showed how Celsius used a substantial amount of money from its investors to inflate the price of its native token, CEL. Pillay added this scheme was described as “very Ponzi like” by one of Celsius’s employees at the time.
Celsius filed for bankruptcy protection in July 2022 amid a severe crypto downturn that eradicated the market’s 2021 gains. Before filing for bankruptcy, Celsius was forced to freeze customer funds in the wake of the Terra-LUNA fiasco.
This article originally appeared on The Tokenist
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