Celsius customers will receive up to 72.5% of encryption

Due to a landmark ruling by Justice Martin Glenn, the courts have ruled that Celsius customers can receive up to 72.5% of their deposited crypto back, although the refund will not be immediate in all cases.

Refund for deposit

The agreement will only apply to depository holders. Nearly 600,000 Earn Such investors would not benefit, as the court ruled in January that Earn account holders signed their crypto to Celsius. This decision gave the failed crypto lender ownership of assets worth up to $4.2 billion, $23 million of which were stablecoins.

To put that in perspective, when Celsius filed for bankruptcy, the company only had about $167 million in cash. It also claimed to have about $4.3 billion in assets with $5.5 billion in debt, of which $4.7 billion was owed to customers or, as Celsius put it, unsecured creditors.

Judge Glenn’s ruling in January cut Celsius’ liabilities down to about $1.3 billion. Furthermore, adding insult to injury, nearly $144 million in legal fees has also been effectively subsidized by client deposits.
The remaining Earn customers will now have a choice between either getting almost three-quarters of their money back or going ahead with litigation.

Half ahead, half by 2024

While those who want to pursue their claims against Celsius to get all the money back are free to do so, those who want to get back at least some of the assets can now submit refund requests. 36.5% of the crypto deposits will be refunded on the spot, while the remaining 36.5% will be paid out “upon settlement” or by the end of the year.

Customers who choose the court-approved refund plan have 30 days to voluntarily participate in the settlement.

“Custodians, including those with an outstanding loan owed to the debtors through the debtors’ loan program, shall be given an opportunity to opt-in to the settlement within 30 days […] of the introduction of the order in accordance with the procedures described […]. Once the settlement is approved, the debtors will be authorized to distribute the entire balance of their withdrawable escrow assets to all eligible users. “

The refund process will be sponsored by NovaWulf Digital Management, which will also raise equity in a new company, NewCo, for the illiquid assets of the Earn customers that have been solidified in the deal.