Celsius Network Reaches Bankruptcy Court, Crypto Contagion Still In Effect?

Beleaguered crypto lender Celsius Network on Wednesday said it has filed a motion with the bankruptcy court to extend the Bar Date, which is the deadline for all customers to file a claim, to next month. Celsius says the reason is to give users another month to submit their claims, but creditors believe the firm is wasting time and legal fees. The crypto contagion is still in effect.

Celsius Network Stretching Crypto Contagion to 2023

Celsius Network in a tweet on January 4 revealed that a motion has been filed in the U.S. Bankruptcy Court for the Southern District of New York to extend the Bar Date, which is the deadline for all customers to file a claim.

The motion will be heard on January 10, 2023. If the motion is approved by the bankruptcy judge, the Bar Date to file claims will be extended to February 9, 2023. Meanwhile, Celsius has created a video for creditors to help with the claims process.

Celsius has committed only $44 million to be returned to customers. Also, Celsius’ creditors had made over 17,200 claims as of December 29. Last week, the crypto lender stated that the goal is to give creditors enough time to file claims.

However, customers have no intention of restructuring and simply want their money back. The reason is due to wasting millions in legal fees by Celsius by extending the timeline of returning funds. Simon Dixon, a shareholder in Celsius, noted that Core Scientific shutting down Celsius crypto mining equipment will impact the creditors’ claim process. It could be the exact reason behind Celsius filing a motion to extend the deadline.

Contagion Still In Effect

The crypto contagion may continue to impact the crypto market growth in 2023. From Terra to the FTX crisis, customers are yet to receive their money back from bankruptcy processes. Sam Bankman-Fried pleads not guilty to all charges in a New York court on Tuesday. He received almost a year free as Judge Lewis A. Kaplan set the trial to October 2.

Meanwhile, customers of bankrupt crypto firms lose hope to get their money back. Therefore, contagion could still exist in early 2023. Experts anticipate a crypto market rally in the second half of 2023.

Also Read: FTX Task Force Formed To Speed Up Recovery of Customer Funds