Celsius Network Chapter 11 Plan Update: Key Takeaways

Overview of Celsius Network's Chapter 11 Plan

The Celsius Network has provided an update on its Chapter 11 bankruptcy plan, which outlines negotiations with retail borrowers and creditors. This update is crucial for understanding how different creditor classes will be treated, especially concerning in-kind crypto returns and CEL token custody.

Clawback Provisions for Retail Users

A significant aspect of the update addresses retail users who withdrew funds before the bankruptcy. Users who withdrew less than $100,000 and accepted the plan are exempt from clawback actions. Those who withdrew between $100,000 and $250,000 can settle 27.5% of their funds in the form of USD, Ethereum, or Bitcoin. However, for withdrawals exceeding $250,000, the litigation trust will evaluate each case individually.

Negotiations with Retail Borrowers

The updated plan reflects Celsius Network's new terms negotiated with retail borrowers. This involves strategic decisions about the treatment of in-kind crypto returns, which Celsius Network views as non-taxable unless the IRS decides otherwise. Further details about these negotiations are anticipated to be released.

Implications for Canadian Pension Funds

In a related development, the Canadian government announced that federally regulated pension funds must disclose their exposure to crypto assets. This measure aims to safeguard Canadians' retirement benefits, especially in light of recent financial failures like FTX and Celsius Network.

The updated Chapter 11 plan by Celsius Network represents an essential step in addressing the financial implications for its retail users and the broader cryptocurrency market. Understanding these updates is vital for stakeholders navigating the aftermath of the company's bankruptcy.