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Celsius creditors are asked to return money

Market and Events: Celsius creditors are asked to return money

Cryptocurrency lender Celsius has notified its creditors who withdrew significant amounts of money in the 90 days leading up to its bankruptcy declaration that they will have to repay some of the funds or could face litigation.

The notice released Tuesday says account holders who withdrew more than $100,000 in the 90 days preceding July 13, 2022, the day Celsius declared bankruptcy, are subject to a refund.

According to the document, affected account holders will soon receive letters instructing them to repay 27.5% of the amount they withdrew during the affected period. If they meet all requirements, they will be eligible for future payouts under the reorganization plan.

This notice allows individuals whose preference amount exceeds $100,000, meaning they withdrew $100,000 or more within 90 days of the date of application, to arrange in advance to pay 27.5% of the amount they withdrew without litigationsaid Alan R. Rosenberg, a partner in the law firm of Markowitz Ringel Trusty & Hartog.

He added that users who withdrew less than $100,000 don't have to pay back the money, but they still have to vote in favor of the plan rather than opt out.

People who fail to meet the above requirements could potentially face lawsuits to recoup the preferences they receivedRosenberg explained.

Celsius declared bankruptcy on July 13, 2022, as the cryptocurrency lender faced a $1.2 billion shortfall. In September 2023, creditors approved a reorganization plan under which deposit account holders would receive 72.5% of their assets in #bitcoin and #Ethereum, while interest-bearing account holders would receive a combination of cryptocurrencies and shares in a new #mining company created from Celsius' remaining assets.

In November, Celsius emerged from bankruptcy proceedings and allowed eligible creditors to withdraw their funds.

Last year, Celsius and its founder and CEO Alex Mashinsky faced lawsuits from the #SEC, FTC and CFTC for misleading customers, and Mashinsky was charged with fraud. His trial is scheduled to begin in the fall of 2024.

Following the bankruptcy proceedings, #Celsius reached a $4.7 billion settlement with the Federal Trade Commission.

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