Insolvent Celsius Network Lures Creditors With Extra 5% Deal

• This motion was filed on Thursday in the US Bankruptcy Court.
• More than $70B in claims for fraud and other actions against Celsius are outstanding.

Insolvent Celsius Network LLC has struck a deal that will simplify its legal proceedings. The company has reportedly offered an extra 5% on its claims if a large number of its account holders agree to take part in a legal settlement over allegations of managerial wrongdoing. Celsius Network’s arrangements may make it simpler for the crypto lender to liquidate and repay consumers’ assets.

With a bonus added to the assets account holders would get under the Chapter 11 plan, Celsius and its unsecured creditors’ committee said they had reached an agreement to settle the committee’s class action fraud claim against Celsius. They said the savings would be “astronomical” and the time it took to get clients their crypto back would be cut significantly.

Streamlining Repayment Process

Moreover, in a move to approve the deal, the cryptocurrency lender said that the suggested arrangement with the committee of unsecured creditors “avoids the delay and costs of potentially protracted litigation.” This motion was filed on Thursday in the US Bankruptcy Court of the Southern District of New York.

More than $70B in claims for fraud and other legal actions against Celsius are currently outstanding. This is according to the settlement motion presented by Celsius and the committee on Thursday.

It was emphasized in the statement that account holders are not obligated to accept the settlement. And might continue to file proofs of claim against the debtors if they so want. Since “Custody” account holders already have an existing agreement with Celsius from March, they are excluded from the settlement.

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