Announcing its bankruptcy, crypto lender Celsius wants to return users’ locked $50 million worth of cryptocurrencies.
The company has sought permission from a US bankruptcy judge to return nearly $50 million in cryptocurrencies stuck on the platform in custody accounts designed to store digital assets rather than generate returns.
Celsius Will Go To Court Again
The company will attend the hearing on October 6, after Celsius requested permission from the judge to return $50 million in crypto from its custody accounts.
According to the company, those who deposited cryptocurrencies to earn interest on their assets transferred ownership of the cryptocurrencies to Celsius, while those who only stored their holdings on the platform technically retained ownership of the cryptocurrencies.
The roughly 50 million Celsius currently being repaid is just a fraction of the $200 million remaining in custody accounts on the platform. Many users switched their assets from interest-bearing accounts to custody arrangements shortly before bankruptcy, Celcius attorney told US Bankruptcy Judge Martin Glenn at Thursday’s hearing. According to Celsius’ lawyer, this allows Celsius to claim ownership of cryptocurrencies. Custody accounts are also a tiny slice of what crypto users can’t save from Celsius.
According to court documents, the market value of assets in so-called earnings accounts totaled approximately $4.2 billion as of July 10.
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