Martin Glenn, the judge overseeing Celsius’ bankruptcy proceedings, has ordered the crypto lending firm to return cryptocurrency worth approximately $50 million to users who use custody accounts, according to a report by Bloomberg on Thursday.
Celsius to Return $50M to Customers
Per the report, the order, which was verbally delivered in a hearing on Wednesday, applies to a stack of crypto worth about $44 million in September.
“I want this case to move forward. I want creditors to recover as much as they possibly can as soon as they possibly can,” Glenn said in the hearing.
The judge’s decision came after Celsius advisers and several stakeholders agreed that crypto assets deposited solely in custody accounts belong to customers, rather than Celsius, the report stated.
The judge is yet to decide the ownership of interest-bearing accounts, which accounts for most of Celsius’ assets. Recently, Glenn stated that the status of the crypto would help potential bidders understand what they are buying.
Celsius Could Claim Ownership of Certain Assets
According to the report, Celsius had more than $200 million worth of crypto in custody accounts as of September, but a significant portion of those assets was transferred to the custody accounts from the company’s interest-bearing accounts shortly before its bankruptcy filing.
“That means Celsius may be able to claim ownership of that crypto because of rules surrounding so-called preferential transfers,” the report stated.
The bankruptcy judge also asked Celsius to return some crypto assets moved from the interest-bearing accounts to custody accounts but only for transfers that were for less than about $7,500 at the time. The report said that about $11 million in crypto “fit into that bucket” as of September. Celsius still owes customers billions of dollars in crypto assets.
Celsius filed for Chapter 11 bankruptcy protection in July, a month after suspending withdrawals and redemption on its platform due to extreme market conditions, which started at the beginning of this year.
According to court filings, Celsius has between $1 billion to $10 billion in assets and liabilities, with more than 100,000 creditors.
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