The company said that those users whose balance is $7500 and below will be able to return their cryptocurrency

Celsius files for a $50 million refund to customers

02.09.2022 - 14:00

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2 min

What’s new? Bankrupt crypto lending platform Celsius Network has filed a petition for about $50 million in customer refunds with the New York Bankruptcy Court. Company representatives noted that the assets were not part of the bankruptcy estate. The filing says the discovered funds are not the property of the platform, so it felt it was fair to allow customers to withdraw them. A hearing in the case will be held on October 6.

Celsius' filing

What are the terms of the refund? The company said that those clients whose balance is $7500 and below will be able to return their cryptocurrency. An important condition is that the funds must simply be stored on the service and not used for revenue generation. On the accounts of the platform, users hold assets of about $225 million, of which it is possible to unlock only $50 million. Celsius added that customers who have transferred assets to the Earn and Borrow service cannot participate in the refund program.

As of September 2 at 10:40 UTC, the Celsius native token (CEL) is trading at $1,46, having gained 22,5% in the past 24 hours, according to CoinGecko. The altcoin ranks 75th on the list of the largest cryptocurrencies by capitalization, with a daily trading volume of $25 million.

The Celsius situation. In July, at the first court hearing on the company's bankruptcy case, defense lawyers said that most of the money that users placed on the platform was actually in the company's possession. In August, the Financial Times reported on the reasons the company lost hundreds of millions of dollars. For example, in January 2022, Celsius head Alex Mashinsky took over the management of the trading strategy. That same month, the Fed was about to announce a change in monetary policy aimed at slowing inflation.

Mashinsky expected the crypto market to decline amid these announcements, so he sold “hundreds of millions of dollars” worth of bitcoins, expecting to buy them back at a discount, but the market moved in the opposite direction and the company suffered large losses.

Read more about how Celsius lost hundreds of millions of dollars of its customers on high-risk schemes in GetBlock Magazine's editorial.

Author:

Tatiana Darda Tatiana Darda

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