- Celsius will enable eligible users to cash out certain custody assets soon.
- Celsius users will receive an email before February 15 about their eligibility.
- An independent examiner described Celsius’ business operation as a Ponzi scheme.
The bankrupt crypto lender Celsius has reaffirmed the commencement of customer withdrawals in the coming days. It shared a 1,400court document via Twitter early today, noting that the withdrawal will be for certain assets in certain custody accounts.
Celsius said eligible users would be asked to update their Celsius account with some required information before any withdrawals are processed for security and regulatory reasons. It added that such customers are only entitled to withdraw approximately 94% of their eligible custody assets. Furthermore, it stated that the court will decide whether or not they will be able to cash out the leftover later.
Moreover, withdrawing customers will receive specific information about gas and transaction fees associated with withdrawal activities, and users without sufficient assets to satisfy the costs will be denied withdrawal.
Also, all Celsius customers can expect to receive email and app communications before February 15 informing them of their eligibility.
Celsius Network had denied customers access to their funds since June 2022, shortly after the collapse of Terra Luna projects, due to extreme market conditions. The crypto lender filed for bankruptcy in July with about $167 million in cash on hand and assets worth $4.3 billion while owing about $4.7 billion to users.
Recently, Shoba Pillay, an independent examiner, said Celsius Network misled its investors and, on occasion, used new customer funds to pay for other customers’ withdrawals, the usual definition of a Ponzi scheme.
Pillay argued that Celsius’ problems did not start in 2022. Instead, serious issues dated back to at least 2020, after Celsius started using customer assets to fund operational expenses and rewards.
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