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As we’ve reported earlier, Celsius Network was granted approval for the extension of its exclusivity period in a bid to dig out a more comprehensive avenue to unveil its reorganization plans.
Bankrupt digital currency lending firm Celsius Network has been ordered by Judge Glenn Martin who is presiding over its bankruptcy proceedings to refund $50 million worth of assets to clients who utilized its custody services. As reported by Bloomberg, the verdict was made verbally on Wednesday and it applies to a pile of cash that was worth about $44 million as of September.
Celsius Network halted withdrawals on its platform back in May and it filed for Chapter 11 bankruptcy in the United States some weeks later. The firm has been through many hoops as it looks for avenues to reorganize its business and repay its creditors. As one of the first major crypto firms to go bankrupt, Celsius Network is far ahead in its proceedings, and orders passed by Judge Glenn Martin can serve as a precedent to guide other related cases.
“I want this case to move forward,” Glenn said in the hearing. “I want creditors to recover as much as they possibly can as soon as they possibly can.”
The verdict will only benefit users who do not subscribe to the firm’s Earn products as the assets lodged with the firm this way belongs to Celsius. As of September, Celsius Network has about $210 million worth of coins in custody belonging to approximately 58,300 users. Of these, $44 million worth of coins belonged to 15,680 clients holding “Pure Custody Assets.”
The argument for this case was that those who kept funds with Celsius Network in a custodial wallet still own their assets as the platform did not commit those funds to reward-earning schemes. Judge Glenn Martin has not yet decided the faith of other assets owed to creditors by the embattled crypto lender.
Celsius Network Bankruptcy: Charting the Way Forward
As reported by Coinspeaker earlier this week, Celsius Network was granted approval for the extension of its exclusivity period in a bid to dig out a more comprehensive avenue to unveil its reorganization plans.
“Celsius participated in two hearings today and continued to advance the dialogue on key matters with important stakeholders in our cases,” Celsius Network said in a tweet to make the announcement, “This morning, we discussed our motion requesting approval to permit the sale of stablecoin, aimed at providing liquidity for our continued operations as we work to maximize value for all stakeholders. The Judge has indicated that he will share his decision soon, likely next week.”
The firm is also charting a way forward by offloading some of its subsidiaries. As Coinspeaker also reported earlier, Galaxy Digital Holdings Ltd (TSX: GLXY) has won the auction to acquire the firm’s Israeli-based custody offshoot, GK8. The deal is still pending regulatory approval and the funds that will be raised from this sale can further be committed to repaying creditors in the near future.