•The U.S. bankruptcy judge responsible for the Celsius Network case has ordered the bankrupt crypto lender to return around $44 million worth of cryptocurrencies, which will impact customer funds that never touched the firm’s flagship interest-bearing lending service.
• According to a recent court filing, around 58,300 users held assets worth $210.02 million in its interest-bearing Earn Program or its Borrow Program; there were just 15,680 customers who held around $43.87 million in what’s known as “Pure Custody” the entire time — these are the customers that will see 100% funds returned according to Judge Martin Glenn’s ruling .
• Customers impacted by the demise of Celsius who kept money in any of their services have until January 3rdto file their claim — Mike Novogratz’s Galaxy Digital won a bid this week to acquire GK8 (self-custody crypto firm) from Celsius for an undisclosed amount
Celsius ordered to pay
The demise of Celsius Network, a crypto-lender based in the United States, has sent shockwaves throughout the industry. On Tuesday, the U.S. bankruptcy court judge responsible for the case issued an order to return around $44 million worth of cryptocurrencies to customers impacted by Celsius’ insolvency. The ruling could have significant implications for those who held assets in the interest-bearing Earn Program or Borrow Program as well as those who held “Pure Custody” funds that never touched the firm’s lending service.
According to a recent court filing, 58,300 users had around $210 million invested in their services while 15,680 customers held around $43 million worth of cryptocurrency in what is known as “Pure Custody” — these are the consumers who will be granted 100% of their funds returned according to Judge Martin Glenn’s ruling. Meanwhile, those with money invested in any other type of Celsius service have until January 3rdto file their claim.
More on top
Further compounding this issue is news that Mike Novogratz’s Galaxy Digital won a bid this week to acquire GK8 (a self-custody crypto firm) from Celsius for an undisclosed amount. The move suggests that GK8 may have considered itself too large and too much of a risk to remain with its current partner and instead chose Galaxy Digital as its new business partner. It also appears that GK8 may have been looking to expand its interests outside of just serving as a custodian for Celsius’ clients — further details on this acquisition are still unknown at this time.
Celsius Network’s failure has become yet another reminder of how quickly things can change in the world of cryptocurrencies and altcoins. As such, it is all the more important for investors to do their due diligence when considering which projects they should back and which companies they should trust with their money moving forward. While some may argue that those investing in crypto are taking on an inherently risky venture due to volatility and lack of regulation, investing with reputable firms like Galaxy Digital provides investors added peace-of-mind knowing that their funds will be kept safe from harm’s way even if one company collapses — something which unfortunately happened here with Celsius Network’s unfortunate downfall.
At least some relief
For now, it seems like several former Celsius customers will get some measure of relief after Judge Glenn ruled in favor of returning most if not all customer funds held within Pure Custody wallets; however, it remains unclear how those with funds locked up elsewhere — including both Earn and Borrow programs — will fare moving forward into 2023. We will just have to wait and see if any new developments arise between now and January 3rd when claims must be filed or else risk forfeiture due to missed deadlines or improper paperwork submissions.
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