Sets stage for decisions going forward
The Celsius bankruptcy hearing continued today but very little was accomplished in dealing with the major situations caused by the bankruptcy. Celsius has filed Chapter 11 is mostly used by businesses but is available to individuals if they want to use it. The filing is known more of a reorganization bankruptcy in which the company is able to reorganize itself and its assets to resume function.
The hearing comes after Celsius sought permission to open withdrawals for specific accounts. The request won’t have a settlement until early October. The motion concerning the permission states that Celsius has claimed the funds are not part of the estate, this means that the funds should be released to the custodial account holders. The issue at hand is about qualification, meaning who qualifies for this release of funds.
Celsius has an Earn and Borrow program that has been stated to belong to the estate per service terms. The analysis to discern if certain customers , some of which have transferred funds from the program, are eligible has yet to be completed. However the counsel for the customers of Celsius would like for the relief to go to all holders. Celsius has stated that all funds may be released in the future but nothing concrete has been promised.
Celsius counsel is also seeking to redact all identifiable information about Celsius creditors from the public docket .Judge Martin Glenn stated he is against allowing the creditors to remain anonymous.
Creditors are usually made identifiable for claims to be lodged. Celsius is arguing that the disclosure of this information may leave customers vulnerable to cyber attacks as this is in the crypto sector. The preference of Celsius is to allow creditors to offer this information voluntarily and not be forced, but automatic information disclosure is usual in the bankruptcy process. The judge still believes the names should be made public but is open to keeping email and home addresses protected.
Cash management was also addressed as the judge approved a interim motion related to cash management but there are still many questions surrounding that management that have gone unanswered such as the safety and storage of all assets.
There is another $61 million coming to Celsius due to a technicality from a loan and that will also be used to return cash instead of stablecoin. Celsius will also consult with other parties before selling any assets to make up for losses.
Finally the judge allowed for sealing of certain parties that signed an NDA in the bidding process.