Judge Approves 72.5% Settlement for Celsius Custody Account Holders

Settlement Approval for Celsius Custody Account Holders

A significant development in the Celsius bankruptcy case has emerged as a United States bankruptcy judge approved a settlement agreement for custody account holders. This agreement allows customers to receive 72.5% of their crypto claims. Payments will be made in two tranches of 36.25% each, with the initial installment provided upfront and the second by the year's end.

Conditions and Implications

Opting into the settlement requires customers to relinquish their right to pursue further litigation against Celsius. This provision specifically excludes Celsius employees and insiders who may have contributed to the company's downfall. The settlement provides a clear path forward for account holders seeking restitution from the cryptocurrency lender's collapse.

Background of Celsius Collapse

Celsius' bankruptcy was a major event in the cryptocurrency sector in 2022. The company froze customer accounts in June of that year, citing extreme market conditions, and subsequently filed for bankruptcy in July. This initiated a lengthy legal process to address the company's financial obligations.

Previous Court Decisions

In December 2022, Judge Glenn ordered Celsius to return $44 million worth of crypto to custody holders, marking a partial recovery for affected customers. However, a January 2023 ruling determined that funds in Celsius' Earn program were legally owned by the company, totaling approximately $4 billion.

Moving Forward

The recent settlement approval represents a pivotal step in resolving the Celsius bankruptcy. It offers a 30-day review period for involved parties and a second chance for creditors to opt-in upon plan approval. This decision aims to provide closure to a challenging chapter in the crypto industry's history.