Celsius Reached Key Agreements to Refund Customers


Bankrupt crypto lending platform Celsius Network has entered into a series of settlement agreements that pave the way for judicial approval to return funds to customers. It is reported by The Wall Street Journal.

According to the publication, one of the deals allows users to settle the claims of users on allegations of fraud by the previous management of the company by increasing the reimbursement by 5%. In total, the agreements resolved 30,000 compensation claims totaling $78 billion.

Judicial documents show that the deal set the stage for the Celsius reorganization plan to be approved in October. Lenders and investors will start receiving funds before the end of the year in case of a positive decision.

The company’s lawyers noted that clients cannot claim amounts in excess of the amount of the deposit. However, some users have filed additional claims for damages from the misconduct of the ex-management.

Another agreement resolves the dispute between the two largest groups of Celsius customers: holders of interest-bearing accounts and recipients of loans in fiat currency secured by digital assets. Borrowers sought a more favorable repayment regime and were able to return cryptocurrency from collateral after repayment of loans.

It is expected that the Bankruptcy Court will consider the concluded agreements for approval in early August.

The Celsius reorganization plan involves returning some of their cryptocurrencies to customers and compensating the remainder with shares in the new company. The latter will be registered by the Fahrenheit consortium led by Arrington Capital and Proof Group. The firm will manage the Celsius mining business and other illiquid assets.

Recall that the US Department of Justice has filed seven criminal charges against the cryptolending platform Celsius and its former head Alex Mashinsky.

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