Bankruptcy Court Sets Deadline for Celsius Users to File Claims

Celsius’ next hearing is scheduled for December 5th, where it intends to advance discussions around Custody and Withhold accounts, etc. 

The US Bankruptcy Court of the Southern District of New York approved crypto lender Celsius’ motion for a deadline for customers to file a claim. January 3rd, 2023, has been set as the last date for creditors to file a proof of claim against the bankrupt firm.

The filing reads,

“The United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) has entered an order (the “Bar Date Order”) establishing 5:00 p.m. prevailing Eastern Time on January 3, 2023 (the “General Claims Bar Date”), as the last date for each person or entity2 (including individuals, partnerships, corporations, joint ventures, and trusts) to submit a Proof of Claim against any of the Debtors listed on page 2 of this notice (collectively, the “Debtors”).

Celsius Notifies Users

The fallen crypto lender also announced the approval by the bankruptcy court and added that it would continue to closely monitor the environment across the industry while assuring that data and asset security remain a top priority.

According to the tweet, the lender’s claims agent Stretto will be notifying the customers with respect to the bar date and their next steps via email or physical mail for those customers with an address on file.

Celsius network halted withdrawals, swaps, and transfers on its platform to stabilize its business amid turmoil in June this year. A month later, it announced filing for Chapter 11 bankruptcy revealing a $1.2 billion hole in its balance sheet. Shortly thereafter, co-founder Daniel Leon stepped down, followed by Alex Mashinsky formally resigning from his position as CEO.

Legal Troubles

At its peak, Celsius reportedly had 1.7 million users and assets under management (AUM) of more than $11 billion. Before it all came crashing down, the company claimed to have generated over $8 billion in loans and had offered extremely high APYs with up to 17% on crypto deposits.

In addition to bankruptcy proceedings, Celsius is currently facing several lawsuits from allegedly running Ponzi schemes to engaging in unregistered securities selling. So far, six states in the country launched investigations into the firm, with the Vermont Department of Financial Regulation being the latest to sue.

Earlier this month, Celsius filed a motion to lengthen the exclusivity period for its reorganization plan.

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