What we had predicted becomes true, Celsius customers are unlikely to recover funds. Crypto lender Celsius Network has filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the Southern District of New York. With this the possibility of the depositors getting back their deposits is gone. Depositors may not get their cash either from deposits or yields.
Celsius Files For Bankruptcy-Customer Lose Their Money
The Crypto Lender terms and conditions make it amply clear that the digital asset of the consumers will not be recoverable if the company becomes bankrupt and enters into a phase of liquidation under a competent authority.
Worse users will not be able to exercise any form of legal rights over Celsius to recover their funds. However the ailing Crypto Lender will be answerable to its creditors under any applicable laws. However dissecting the terms and conditions which customers agree hints towards complete loss of any and all digital assets in Celsius accounts and custody wallets.
Celsius along with its subsidiaries has filed for bankruptcy and has disclosed a total of 50 creditors. Celsius it seems does not have or has not disclosed details of depositors having limited money except the big depositors. The last creditor is a customer with $5,588,694.
The creditors whose details can be accessed on a file include Sam Bankman-Fried’s owned Alameda Research, USD Fund SP Pharos Fund SP, B2C2 Ltd, Covario AG, Pharos and Invictus Capital.
The ailing Crypto Lender has on its part updated its FAQs related to the Chapter 11 bankruptcy filing, customer loans, and stakeholders. The crypto lender is now seeking value for its stakeholders with restructuring. However it will not enable customer withdrawals. Consumers seeking information may contact the company, and shareholders looking for more details may contact claims agent Stretto.
Celsius’ CEL Token, stETH and Loans
CEL token price tanked from a day high of $0.95 to a low of $0.45 after the announcement. Currently, it is trading near the $0.55 level. As per blockchain data firm Zapper has been able to diminish a large part of its outstanding. It has paid loans totaling over $1 Billion it owed to Maker, Aave, Compound, and others. The company says it has $167 million cash in hand and proposes to use it to continue operations.