Celsius Network Nears Settlement to Return Customer Assets Amid Bankruptcy Proceedings
The Wall Street Journal reports that Celsius Network, a prominent cryptocurrency lending platform currently in bankruptcy proceedings, has reached tentative settlements that may pave the way for the return of customer assets.
The settlements were reported to be aimed at resolving customer claims related to allegations of fraud by raising recoveries by 5%. According to the WSJ, a total of 30,000 claims seeking $78 billion could potentially be settled as a result of these agreements. Celsius Network is set to seek court approval for these settlements in a hearing scheduled for August 10th.
If the proposed settlement plan receives court approval, this could significantly expedite the process for returning customer assets. A confirmation hearing on Celsius’ reorganization plan has been scheduled for October, with customer disbursements potentially beginning before the end of the year.
While lawyers for Celsius have argued that customers should only be repaid the exact amount they had deposited, some users have sought additional damages due to alleged misconduct by the company’s former management.
Earlier this month, the Securities and Exchange Commission (SEC) filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky. The complaint accuses them of raising billions through fraudulent and unregistered sales, misleading investors, and manipulating the price of their native token.
Celsius Network filed for bankruptcy about a year ago in one of the most high-profile collapses in the crypto industry to date. At its peak, the crypto lender reportedly held $30 billion in assets. This case will continue to be closely watched by crypto industry observers and regulators alike.