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Celsius Advisors Demand $2 Billion Withdrawn Before Bankruptcy, Aim to Avoid Litigation

In the ongoing liquidation process of Celsius Network LLC, consultants overseeing the proceedings have made a significant demand for the return of $2 billion from key clients.

As reported by Bloomberg, a committee formed during the bankruptcy case is urging the return of assets that were withdrawn by Celsius’s major clients shortly before the company filed for bankruptcy, with the aim of averting potential litigation and facilitating the repayment of creditors.

Consultants have initiated contact with clients who withdrew more than $100,000 from the platform prior to its bankruptcy filing. The recovered assets will contribute to repaying creditors who have yet to access their funds from Celsius.

“The committee is offering customers the option to settle their potential liabilities based on the value of their assets at the time of withdrawal in 2022, allowing settling customers to retain any appreciation of their digital assets experienced over the past year due to soaring crypto prices,” noted Bloomberg.

This recovery effort is anticipated to impact approximately 2% of Celsius users, who collectively withdrew about 40% of the platform’s assets within 90 days preceding the Chapter 11 filing. At the time of bankruptcy, Celsius reported holdings of $6 billion in crypto assets, with 1.7 million registered users and 300,000 active users holding account balances exceeding $100.

By mid-August 2022, Celsius Network found itself in a precarious financial situation, with debts surpassing assets by $2.85 billion. The deficit was nearly 2.5 times greater than initially estimated upon filing for bankruptcy, which cited a shortage of funds amounting to $1.2 billion.

Creditors of Celsius Network have devised a reorganization plan, which garnered approval from the majority of account holders. The plan entails the distribution of over $3 billion in cryptocurrency and fiat funds to creditors, signaling a potential resolution to the complex bankruptcy proceedings.

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