Celsius Initiates Fund Withdrawals Following Bankruptcy Filing

Celsius, a popular crypto lending firm, has recently announced that its customers can now withdraw assets from its platform after eight months of waiting.

The announcement came in the form of an official tweet on March 2, revealing that withdrawals are now available for certain custody accounts only.

This development follows a court order in January, which authorized Celsius to process withdrawals, but only for assets in a Celsius custody account. These include “Pure Custody” assets and “Transferred Custody” assets that were moved from an Earn or Borrow account to a custody account 90 days before Celsius filed for bankruptcy.

However, not all custody accounts are eligible for withdrawals. Those that had received assets worth over $7,575 from the Earn or Borrow Program are currently ineligible. According to the court order, only 94% of distributable assets can be withdrawn from all eligible accounts for now.

Celsius filed for Chapter 11 bankruptcy in mid-July 2022, owing customers a total of $4.7 billion. The company’s collapse was mainly due to the value of several crypto assets plummeting rapidly due to a widespread liquidity crisis.

Since then, Celsius has been working internally to restructure its operations and pay off its creditors. On February 15, 2023, the company announced its acquisition by digital asset investment firm NovaWulf Digital Management.

This acquisition aims to sponsor Celsius’s reorganization plan and allow the company to close the Chapter 11 bankruptcy process and begin full funds distribution as early as June.

Celsius intends to pay off all its earn creditors with liquid cryptocurrency, with earn creditors with claims less than $5,000 considered a “convenience class” and eligible for only 70% of their claim, paid out in BTC, ETH, and USDC.