- Celsius files to reopen withdrawal to Custody and Withhold account holders.
- Simon Dixon, CEO of BnkToTheFuture.com, points out that $50 million is far too short of what is equitable.
- Celsius lawyer defines “Pure Custody/Withhold Assets” and “Transferred Custody/Withhold Assets.
Crypto lender Celsius filed a motion with the US Bankruptcy Court seeking permission to reopen withdrawals to customers who hold digital assets at Celsius. Celsius was compelled to take this move after 64 Ad hoc custodial account holders lodged a complaint against Celsius freezing all withdrawals.
However, the motion has much more than what meets the eye: it applied only to Custody account holders and Withhold account holders and for custodied assets above $7,575.
Celsius structured Custody and Withhold accounts to have legal ownership of users’ assets, while the possession is not granted to those who hold assets in Earn and Borrow accounts. Celsius states that assets held in Earn and Borrow accounts are likely property of their estates.
The CEO of BnkToTheFuture.com, Simon Dixon, believes that Celsius wants to release far too short of what is equitable.
#Celsius currently stating that those that were moved to custody 90 days before filing should be withheld. Custody is now $210m & they want to release $50m. They want to reserve the rest for clawbacks. They believe all earn funds belong to #Celsius 🤮 OPINION This is illegal bank https://t.co/efGb3XPU2b
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) September 1, 2022
Dixon pointed out that Celsius was willing to release only $50 million, whereas it holds about $210.02 million from 58,300 users in Custody Accounts with another $15.33 million from Withhold Accounts.
As per bankruptcy code 547(c) (9), Celsius cannot avoid transferring amounts less than $7,575 and made Celsius do a proper apportioning for the $50 million. This had the Celsius lawyers distinguish between “Pure Custody/Withhold Assets” and “Transferred Custody/Withhold Assets,” with “Pure” assets which were not transferred from the Earn or Borrow Programs.
Custody Customers consist of Pure Custody Customers and Transferred Custody Customers.15,680 Pure Customers held assets worth $43.87 million while 22,580 Transferred Custody customers held approximately $11.25 million.
Withhold customers consists of Pure Withhold and Transferred Withhold Customer. 470 Pure Withhold customers held approximately $702,360 while 3,180 Transferred withhold customers held approximately $1.04 million.
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