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Crypto Lender Celsius' Bankruptcy Judge Orders It to Return $50M of Crypto to Custody Account Holders: Bloomberg
Celsius filed a motion in September to return crypto to customers who held assets in such accounts.
Updated May 9, 2023, 4:04 a.m. Published Dec 8, 2022, 3:36 a.m.
A U.S. bankruptcy judge involved in the Celsius Networks bankruptcy case ordered the crypto lender to return crypto worth $50 million to users of custody accounts, Bloomberg News reported on Thursday.
Celsius, about a month after its bankruptcy filing in July as reported by CoinDesk, in September filed to return custody holders' funds to them, ahead of a separate hearing to address ongoing questions about its efforts to restructure and relaunch its operations.
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According to the filing, Celsius has about 58,300 users who collectively deposited over $210 million with its custody and withhold, with 15,680 customers holding "Pure Custody Assets" worth around $44 million. The Bankruptcy Court for the Southern District of New York, which is overseeing the case, scheduled a hearing for Oct. 6 to discuss the matter.
The order was delivered verbally in a hearing Wednesday, and applies to applies to an amount of crypto that was worth about $44 million in September. Celsius owes billions of dollars of coins to other users.
Celsius' argument was that unlike Celsius customers using its Earn or Borrow products, customers with custodial accounts still maintain ownership of their crypto assets. Celsius was merely acting as the storage provider. Therefore, these funds belong to the customers, not to Celsius' estate.
Read more: Looking at the Claims Celsius Operated Like a Ponzi
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