Crypto lending firm Celsius, which filed for bankruptcy in August, is looking to open a withdrawal service for users holding accounts on its platform. The company recently filed a filing with the Bankruptcy Court for the Southern District of New York seeking the necessary approvals to enable select users to divest their assets from Celsius’ possession. As part of its filing, Celsius also acknowledged that user assets held by the program in its possession are not classified as company assets. This statement is in stark contrast to what lawyers representing the crypto firm said in August, claiming that assets held by users on Celsius belonged to the firm.
According to Entering CelsiusAs of August 29, about 58,300 users have ‘assets in custody’ worth about $210 million (roughly Rs. 1,670 crore) on the Celsius platform.
Additionally, around 5,000 users have ‘held assets’ worth around $15 million (roughly Rs. 120 crore) on Celsius.
The platform aims to enable all these custody account holders to withdraw their savings.
Celsius launched this custody program in April for non-accredited investors in the US. Unlike Celsius clients, who deposited funds into the company’s high-yield earning product, custody clients did not collect interest. They used Celsius for storage, not for putting money to work.
Last month, lawyers representing Celsius said that users operating custody accounts on the Celsius network may have divested themselves of their own rights to their crypto assets when accepting the platform’s Terms of Service (ToS).
In retaliation for these claims, a group of Celsius users joined forces to file a mass complaint against Celsius.
Recently, a New York judge allowed a crypto lender to mine and sell bitcoin during its bankruptcy, despite opposition from unsecured creditors.
The embattled lender has previously revealed in court that he is short of funds. He also disclosed that he had received several proposals for cash injection without naming the parties from whom he had received such proposals.
