Celsius Network won court approval to distribute bonuses worth $2.8 million to its employees. But what about users’ funds?
A U.S. bankruptcy court has approved the key employee retention program (KERP) for the bankrupt crypto lending platform Celsius. As a part of KERP, it will give a total bonus worth $2.8 million to its non-executive employees.
The $2.8 Million Employee Bonus
Since Celsius filed for Chapter 11 bankruptcy in July, employees have been leaving in droves. It went from 370 employees to just 170 by the time of the court hearing on Monday. A further 20 employees are in the process of leaving.
Celsius got approval for a $2.8 million bonus plan from U.S. bankruptcy Judge Martin Glenn to retain the employees and keep the operations running. According to a Bloomberg report, the bonus payment will be up to $75,000 for employees earning in the range of $25,000 to $425,000.
Another lending platform, BlockFi, which filed for Chapter 11 bankruptcy last month, is also looking to establish a key Employee Retention Plan. BlockFi claims to have liquidity of $256.9 million to continue internal operations during the restructuring.
Celsius to Sell $18 Million Worth of Stablecoins
Further, as a part of the reorganization, Celsius is looking to sell stablecoins worth $18 million to provide liquidity to continue operations. According to a tweet from Celsius’s official account, the judge will likely share his decision next week. The community has lashed out at Celsius for planning to sell users’ funds.
The court approved an extension for Celsius’ exclusivity period until Feb. 15, 2023. The company can submit its reorganization plan within this period. Twitter users questioned why Celsius needed eight months for restructuring. The YouTuber Aaron Bennett criticized Celsius’ action and compared it with BlockFi’s quick restructuring plans the moment it filed for bankruptcy.
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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.