Can investors expect repayments?

It has been almost a year since Celsius Network, one of the largest crypto lending services in the industry, filed for bankruptcy. Since then, the victims have feared for their deposits. For a long time it was unclear whether the US company was even able to pay compensation. Now the responsible bankruptcy court in New York proposes several comparisons and gives investors a choice. That shows a court document.

It’s about $78 billion in bad debts against Celsius Network. Judge Martin Glenn plans to make a decision on August 10th. Investors have until August 3 to say whether they agree or disagree with the agreement. One of the deals includes the following:

Investors can drop claims for damages surrounding the allegations of fraud and deception against Celsius management. In return, the injured users receive an additional 5 percent on their deposits. Aggrieved users who reject the deal can still sue individually. However, the court warns of a trial that could take “months, if not years”.

Partial settlement via crypto and share certificates

Part of the compensation should even be processed via cryptocurrencies. Claimants who lent their coins to Celsius under the Earn program are said to receive an “equivalent amount” in crypto. This also brings tax advantages, according to the document. However, it remains unclear whether the compensation will also be processed using the same coin or token.

However, investors can forego part of the compensation in order to receive first access rights and a 30 percent rebate on shares in a “new company” to emerge from the bankruptcy proceedings.

With the deal, the old management is trying to whitewash itself legally in order to start again with a new company. Only one will probably no longer be on board: ex-CEO Alex Mashinsky. He is still in custody and will be brought before the magistrate for the first time tomorrow. However, one thing is clear: the Celsius chapter is coming to an end.