As part of its bankruptcy, Celsius has frozen all of its customers' funds. They don't want to give back the lion's share because Celsius had designed its terms and conditions in such a way that the assets were lent to the company by the customers. As a result, many Celsius customers have become creditors who are reclaiming their loans. In total, Celsius owes $4.7 billion in customer funds. However, the residual value of the retained assets is well below this amount due to market conditions.
This legal ploy caused a lot of outrage, although to Celsius's credit the terms and conditions made that clear. In particular, investors who rely on Celsius's popular Earn program to generate returns are left empty-handed. But this regulation does not apply to all customers of Celsius and therefore the ailing company has to and wants to part with part of the retained customer funds.
However, before this can come true, a corresponding application must be approved by the appointed creditors' committee.
Who should get something back?
It is primarily about customers whose deposits are classified as "custody assets". Therefore, these are funds that have been undisputedly taken into custody by Celsius and thus enjoy a certain degree of protection.
According to Celsius' request , a total of $210 million is at stake from over 58,000 customers affected worldwide. You want to open the gates for them and allow their assets to be withdrawn. The filing, while filed by Celsius, came just weeks after a group of creditors filed a lawsuit. Her goal is to recover approximately $22 million from Celsius' custody program.
While Celsius' motion offers some hope, it could just be an attempt to forestall further lawsuits.
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