Celsius’s Bankruptcy Crisis
Celsius was a fintech platform that provides borrowing, digital and fiat payments, and interest-bearing savings accounts.
In June 2022, it filed for bankruptcy. According to Bloomberg, Celsius co-founder and CEO Alex Mashinsky said that the platform’s digital asset count increased more quickly than Celsius was prepared to use.
As of July 13, 2022, the platform had roughly $4.31 billion in assets and $5.5 billion in liabilities, according to court records. Following the bankruptcy filing, there were more customer trips, which caused the withdrawals to stop on June 13, 2022.
US Court’s Deadline
The bar date of January 3, 2023, has been approved for Celsius’s clients; till this date, they must submit a claim for the entities that were held until July 13th, i.e., before the firm became insolvent.
December 5th is the next scheduled day for court proceedings, during which additional arguments about the custody and withholding accounts will be considered. Similar to every other cryptocurrency platform in the present market, the Celsius network makes the same promise: “data and asset security remain a top concern for all.”
Celsius’s Plan For Reorganization
In motions, Celsius asked the court to extend the time it had to present a reorganization plan.
Celsius was given 120 days of exclusivity to present a bankruptcy plan after filing for Chapter 11 bankruptcy in July.
According to court documents, the lender utilized the four months to “lay the foundation for additional conversations” aimed at offering relief to its consumers.
Celsius Customer Claims: FAQs
- How do Assets and Liabilities Schedules work?
Celsius files records with the Court as part of our Chapter 11 proceedings that include, among other things, a list of all customer balance sheets as of July 13, 2022, the date the reform started, as well as a list of customer transactions in the 90 days prior to the Chapter 11 filing. Customers can obtain the Schedules at https://cases.stretto.com/celsius/court-docket/schedule-statements/.
- Do I need to submit a claim?
There is no need to fill up and submit a proof of claim form if you accept Celsius’ records as filed; no further action is necessary. You would need to provide evidence of claim if you disagree with the data or if your claim was flagged as “contingent,” “unliquidated,” or “disputed.”
Please be aware that the Stretto website’s current proof of claim form will likely be updated to make it simpler for users to submit data about their cryptocurrency balance.
- When is the last day to submit a claim?
The “Bar Date” or deadline to submit a claim has not yet been set by the Court. In the near future, Celsius will submit a motion asking the Court to adopt claim-filing procedures and set a bar date.
Customers will get comprehensive instructions on how to submit a claim as soon as the processes are approved. Stretto will send this notice to the email address connected to your Celsius account, and it will make any deadlines crystal apparent.
- What will my proof of claim look like once it has been received?
After submitting your form online, you will get a confirmation email and a reference number for your proof of claim.
If you decide to mail your claim, you must send two copies along with a self-addressed, postage-paid envelope for receipt confirmation.
- Once the bar date has passed, what happens?
Celsius will compare all submitted claims to the records after the Bar Date. Eligible claims will be paid out in accordance with the Chapter 11 Plan after all claims have been compared and authorized by the Court.
Bottom line
Due to the company’s incompetence, the clients are currently unsure whether their assets should be included in the bankruptcy petition.
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