A bankruptcy judge overseeing the bankruptcy case of crypto-lending platform Celsius Network has approved a liquidation plan that allows custodial account holders to recover 72.5% of their crypto holdings.
In a March 21 hearing, United States Bankruptcy Judge Martin Glenn signed outside of a deal that allows Celsius custodial account holders the right to receive 72.5% of their crypto claims, provided they approve the deal. Under the settlement, the plaintiffs may not "pursue any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action" and digital assets not part of the settlement will be controlled by Celsius's debtors. .
Bankruptcy Court: The #Celsius The custody agreement is approved. It will be optional for customers. 30 days to review. Subscribers will earn 72.5% of their claim in two distributions, 36.25% in advance and 36.25% at plan termination (or at the end of the year).
— Camera crews (@camcrews) March 21, 2023
The agreement between the committee of unsecured creditors, Celsius debtors and an ad hoc group of account holders was the latest development in the lending platform case in the US Bankruptcy Court for the Southern District of New York since filed for Chapter 11 in July. The extinct platform announced in February that NovaWulf Digital Management would act as sponsor for its restructuring plan, in which it was suggested that more than 85% of Celsius clients would recover approximately 70% of their cryptocurrencies.
judge glenn ruled in january that more than $4 billion in funds from Celsius' interest-bearing Earn program belonged to the lending platform. However, a December ruling ordered approximately $44 million worth of crypto be returned to Celsius' clients, and a February judge's decision authorized Celsius's debtors to sell $7.4 million worth of Bitmain coupons if required.
Related: Celsius lawyers and advisors' fees are on track to reach $144 million, community responds
Bankruptcy proceedings for major crypto firms amid the 2022 market crash are ongoing in US courts, now the backdrop of Signature, Silicon Valley and Silvergate ban rulings. On March 17, debtors in bankruptcy case of crypto exchange FTX reported a deficit of approximately $7 billion between scheduled assets and claims.