Bankrupt Celsius Network Reaches Settlement, Agrees To Pay More To Customers

Bankrupt Celsius Network LLC  has reached a settlement that will make it easy for the organization in court. It is offering to pay 5% more on its claims if numerous account holders want to participate in a litigation settlement concerning charges of management misconduct, the WSJ reported. The agreements made by Celsius Network may make it easier for the cryptocurrency lender to obtain court approval for its intention to liquidate its bankruptcy and refund customers’ assets.

Celsius Agrees To Pay Customers More

In a joint motion, Celsius and its unsecured creditors’ committee announced that they had agreed to resolve the committee’s class action fraud claim against Celsius with a bonus to the assets account holders will receive in the company’s Chapter 11 plan. They claimed this would result in “astronomical” cost savings and speed up the return of cryptocurrency to its customers’ hands.

The proposed agreement with the committee of unsecured creditors “avoids the delay and costs of potentially protracted litigation,” the cryptocurrency lender claimed in a motion to accept the agreement that was submitted to the Southern District of New York’s US Bankruptcy Court on Thursday.

According to the settlement motion submitted on Thursday by Celsius and the committee, more than $70 billion in claims for fraud and other legal claims against Celsius are now pending, unconnected to its duties under its customer contracts.

Importantly, any account holder can choose not to participate in the settlement and still pursue their proofs of claim against the debtors, the statement read. Owners of so-called “Custody” accounts are not included in the settlement because they negotiated their agreement with Celsius in March.

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Deal To Reduce Litigation Costs 

The agreement would lower legal expenses and the amount of cryptocurrency Celsius will need to hold in reserve for disputed claims, according to committee attorney Aaron Colodny in an email sent on Friday.

The bankrupt cryptocurrency exchange had previously agreed to a $4.7 billion settlement with the Federal Trade Commission. The former CEO of Celsius, Alex Mashinsky, was detained last week on federal securities fraud allegations.

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