New update on Celsius bankruptcy case made Jan. 4 as Judge Martin Glenn control The $4.2 billion in funds deposited into Earn Accounts is the property of Celsius, not the investors.
The judgment document states:
“Under Celsius’ express terms and conditions, and subject to the defenses withheld, the court held that once virtual currency assets (including stablecoins, which are discussed in more detail below) are credited to Earn Accounts, virtual currency assets are Celius and the cryptocurrency assets remaining in the Earn Account on the date of the petition became the property of the debtor’s bankruptcy estate (the “Property”). “
According to documents, Celsius had about 600,000 accounts in the Earn program when the account holders filed the lawsuit. Funds deposited into these accounts have reached $4.2 billion as of July 10, 2022.
Many account holders claimed they were entitled to the funds and demanded full refunds. If the judge takes the side of the account holders, this decision will tie their recovery to distributions to unsecured creditors under the confirmed Chapter 11 plan.
Celsius has secured an extension to submit its Chapter 11 Restructuring Plan on December 6, 2022. Lenders in bankruptcy have until February 15, 2023 to submit a detailed plan disclosing how they will maximize the interests of all creditors and stakeholders.