Celsius Customers Have Until January To Submit Bankruptcy Claims
The court has granted the defunct crypto loan business Celsius a bar date of January 3, 2023.
The U.S. Bankruptcy Court for the Southern District of New York has granted a request by the insolvent cryptocurrency lender Celsius to establish a deadline for its clients to file proofs of claim in the current bankruptcy proceedings.
“The bankruptcy court approved our motion to set the bar date, which is the deadline for all customers to file a claim. The bar date has been set for January 3, 2023,” Celsius wrote in a Twitter post-Sunday.
According to Celsius, the company’s claims agent, Stretto, will contact consumers about the bar date and their subsequent actions by email or regular mail for customers with an address on file.
This week, the bankruptcy court approved our motion to set the bar date, which is the deadline for all customers to file a claim. The bar date has been set for January 3, 2023.
In addition, consumers can anticipate a message inside the Celsius app.
The court decision also included a list of categories for which clients would not be required to produce evidence of a claim.
These include clients whose claims are not listed as “disputed,” “contingent,” or “unliquidated,” as well as situations in which the claimant does not dispute the claim’s quantity, type, or precedence.
As a reminder, customers who agree with Celsius’ scheduling of their claims as filed in the Schedules of Assets and Liabilities do not need to submit a proof of claim and no further action is required of them at this time with respect to such claim. https://t.co/zymkBeyZm5
After the crypto market fall in June this year, Celsius became one of the first large crypto lenders to halt customer withdrawals. After weeks of quiet, the company finally filed for Chapter 11 bankruptcy, disclosing a $1.2 billion hole in its financial sheet.
Alex Mashinsky, the CEO of Celsius, resigned in September after reportedly being responsible for a string of disastrous transactions in early 2022. Mashinsky allegedly took up to $10 million from the business’s account in May, weeks before the company banned withdrawals.
In September, the Vermont Department of Financial Regulation stated that Celsius had been privately insolvent since 2019 and that CEO Alex Mashinsky had made false and deceptive claims to inflate the company’s financial health.
Judge Martin Glenn of the United States Bankruptcy Court has ordered the court-appointed examiner and the official committee of Celsius creditors to determine who would investigate the company’s usage of customer funds. At the time, Greg Pesce, the creditor’s committee’s lawyer, told the Wall Street Journal, “We don’t know if Celsius was a Ponzi scheme, but there are flags that came up,” adding that the probe was “looking into whether it is.”
The investigation into Celsius’ activities has been expanded to cover the company’s marketing methods and statements made to potential clients, as well as its management of CEL, the platform’s native cryptocurrency.
The next Celsius case hearing is planned on December 5.
