Celsius resumes withdrawals for some users

Withdrawal resumed for some custody users

The collapsed crypto asset (virtual currency) lending company Celsius Network announced on the 3rd that it has resumed withdrawals to some custody users. Eligible users will be notified separately of withdrawal instructions.

Today, withdrawals will reopen for Distributable Assets in certain Custody Accounts.

— Celsius (@CelsiusNetwork) March 2, 2023

This time, withdrawals are permitted for user accounts that have never participated in the yield program “Earn” or the lending program “Borrow” and have only used the custody service.

It also covers assets transferred from Earn or Borrow to custody services in the 90 days before Celsius files for bankruptcy in Chapter Eleven in July 2022. In this case, accounts with approximately ¥1,030,000 ($7,575 or less) would be permitted to withdraw, as stipulated by the bankruptcy law.

Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)

A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.

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Current and former employees of Celsius and employees of Celsius affiliates are not eligible to withdraw assets at this time.

The maximum withdrawal amount will be 94% of the target user’s assets under custody minus transaction fees. Celsius has now reached a settlement with a group of custody account holders regarding the withdrawal of custody funds.

After the court officially approves the settlement, eligible users will be able to withdraw the remaining 6% of their funds.

Celsius said it would follow up with further notice about the Withhold service and withdrawals of customers who deposited funds on the platform after Celsius filed for bankruptcy. Withdrawals for Earn users have not yet been decided, but will be notified as soon as they are decided.

Celsius stopped withdrawing customer funds in June following a string of defaults in the cryptocurrency market in 2022. In July, Chapter Eleven filed for bankruptcy in the United States. Currently, bankruptcy proceedings are underway on the premise of corporate reconstruction.

To corporate reconstruction

Celsius just announced on February 15 that it has selected digital asset investment firm NovaWulf Digital Management as the sponsor of its corporate restructuring plan.

1-Last night Celsius (with UCC support) selected NovaWulf to sponsor a reorganization plan that will distribute liquid crypto to all account holders, as well as create a litigation trust and provide creditors with common equity in a NewCo holding illiquid assets like mining.

— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) February 15, 2023

Celsius will be restructured, and Nova Wolf plans to contribute up to 7.5 billion yen ($55 million) to the restructured new company. The new company will be a regulated company 100% owned by the creditors of the Earn service. Nova Wolf said:

Nova Wolf has reached a basic agreement with Celsius to return the majority of its liquid tokens to creditors, maximize the value of its illiquid assets, and support Celsius’ plans to rebuild its business. reached.

We are focused on distributing assets to creditors and offering creditors the opportunity to invest in the growth of the digital asset industry through equity ownership in the new company.

About 85% of creditors expect to get back about 70% of the dollar value of their original cryptocurrency investments on the day they filed for bankruptcy, according to NovaWolf. Remaining creditors will receive distributions of liquid cryptocurrency and shares of the new company.

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