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Celsius Network Offers Settlement Plan for Large Account Holders Amid Bankruptcy Proceedings

2 mins
Updated by Kyle Baird
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In Brief

  • Under Celsius Network's Chapter 11 plan, account holders with liabilities over $100,000 are required to settle by January 31, 2024.
  • To be eligible for the Celsius settlement, account holders must not have rejected the Plan and have an exposure exceeding $100,000.
  • According to a court filing, Celsius customers will bear the cost of withdrawal fees on a per-transaction basis.
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In a major development within the Celsius Network LLC bankruptcy saga, the company has extended a settlement opportunity to its large account holders.

As outlined in the notice under the Chapter 11 bankruptcy proceedings, account holders facing “Withdrawal Preference Exposure” have been called upon to settle their financial obligations by January 31, 2024.

Celsius Network Bankruptcy Saga

Withdrawal Preference Exposure, as the term suggests, pertains to the potential liabilities of account holders who made significant transfers within the 90 days leading up to the Petition Date, July 13, 2022. This requirement is a crucial component of the Modified Joint Chapter 11 Plan of Reorganization.

The filing tightly defines eligibility for this settlement plan. Account holders with exposure exceeding $100,000 are eligible. There are stipulations, however. They cannot be ‘Excluded Parties,’ have not voted against the Plan, and have not opted out of the releases. The notification of this settlement opportunity comes as an email containing a detailed notice and an election form to initiate the settlement process.

For account holders desiring to settle, the path is clear but time-bound. They must submit their election form by January 25, 2024, and make their settlement payment by January 31, 2024.

The notice also clarifies that Celsius account holders with an exposure of $100,000 or less do not need to take any action. However, those who do not settle their exposure might face legal consequences from the Litigation Administrator following the Effective Date.

Settlement payments will directly impact the distribution of funds to creditors. This increases the total amount distributed.

Read more: 4 Best Crypto Learn and Earn Platforms in 2024

Time for Celsius Customers to Act

Last month, the United States Bankruptcy Court for the Southern District of New York detailed the process for Celsius customers to retrieve their cryptocurrency assets.

According to the filing, customers must update their Celsius account with necessary information to comply with Anti-Money Laundering regulations. Notably, customers will bear the withdrawal fees on a per-transaction basis.

Initial Withdrawal Fees Associated With Each Crypto. Source: Stretto
Celsius Network Initial Withdrawal Fees Associated With Each Crypto. Source: Stretto

Overall, these moves mark critical steps in addressing the financial complexities faced by the company and its stakeholders.

The focus now shifts to the account holders’ response and the subsequent impact on the company’s restructuring efforts.

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Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

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Kyle Baird
Kyle migrated from the East Coast USA to South-East Asia after graduating from Pennsylvania's East Stroudsburg University with a Bachelor of Science degree in 2010. Following in the footsteps of his grandfather, Kyle got his start buying stocks and precious metals in his teens. This sparked his interest in learning and writing about cryptocurrencies. He started as a copywriter for Bitcoinist in 2016 before taking on an editor's role at BeInCrypto at the beginning of 2018.
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