Celsius Bankruptcy: $44 Million Ordered for Return to Customers

Judge’s Directive: Motion to Reimburse Customers

A federal judge has stepped in to assure those tangled in the Celsius bankruptcy saga. During a recent hearing on December 7, Bankruptcy Judge Martin Glenn declared that around $44 million in cryptocurrency must be returned to customers.

Understanding the Custodial Accounts

This order specifically targets crypto assets held in custodial accounts. Unlike funds sitting in Celsius’ Earn accounts, which generated interest (and apparently a headache for many), custodial funds have always belonged to the users. In the grand scheme, this $44 million is just a drop in the bucket, as the total debt owed to creditors is in the billions.

What Are Custody Assets, Anyway?

Let’s break this down! Custody assets are those that have never seen the inside of Celsius’ Earn accounts. Customers who deposited funds into custody accounts maintained their ownership. As of August 29, Celsius had over $210 million in custody accounts, but only a mere $44 million made the cut for this latest ruling.

Implications for Earn Account Holders

Now, for those of you who blissfully deposited your funds into Celsius’ Earn accounts, there’s a twist in your cryptocurrency tale. Celsius has argued that by agreeing to the terms of service, users relinquished ownership. What a plot twist! Furthermore, there’s been talk of selling $18 million worth of stablecoins from these accounts to fuel the company’s reorganization plans. Talk about a rollercoaster!

Key Employee Retention Program: Holding Onto Talent

In the midst of financial disarray, Celsius has managed to secure approval for a $2.8 million Key Employee Retention Program (KERP). This move aims to keep select employees on board amidst a mass exodus; only about 170 employees remain compared to 370 when bankruptcy proceedings kicked off. Let’s hope those retention bonuses have some golden handcuffs!

What Lies Ahead?

The ongoing saga isn’t finished yet. Judge Glenn is expected to tackle the thorny issue of fund ownership on December 12. Meanwhile, customers wait with bated breath as the drama unfolds. Fingers crossed for a joyful resolution amidst the blockchain chaos!